Corporate Transparency Act (“CTA”)
Abrahm specializes in helping companies comply with the new Corporate Transparency Act
Summary of the CTA
The CTA requires certain entities to file reports with FinCEN that identify (i) the beneficial owners, and (ii) company applicants (i.e., individuals who have filed the corporate formation documents). Reporting starts after the effective date of final regulations. Final regulations have not yet been issued.
Reporting Deadlines
Reporting Companies must file an Initial Report with FinCEN as follows:
- New Companies - 14 days from formation
- Existing companies – 1 year from effective date
Reporting companies must report
- Full name of company (and any trade name or “doing business as” name)
- Business street address of company
- State of formation
- EIN (if EIN not yet issued, DUNS number or Legal Entity Identifier)
Individual beneficial owners and company applicants must report
Reporting Companies must file an Initial Report with FinCEN as follows:
- Full legal name
- Date of birth
- Complete address
- For a Company Applicant, the business street address of the business
- In all other cases, the residential street address that the individual uses for tax residency purposes
- Unique identifying number from one of the following:
- Non-expired US passport
- Non-expired identification document issued by a state or local government
- Non-expired driver’s license issued by a state
- Non-expired passport from a foreign government if the person doesn’t have one of the documents above
Companies exempt from reporting (23 specified companies)
- SEC registered companies, banks, insurance companies, public accounting firms, tax exempt entities, etc.
- Large Operating Companies
- Employs more than 20 full time employees,
- Operating presence at a physical office with the United States, and
- Filed a US income tax or information return in the United States for the previous year demonstrating more than $5,000,000 in gross receipts or sales, excluding gross receipts or sales from sources outside the United States.
- Inactive Entity
- Was in existence before January 1, 2020,
- Is not engaged in active business,
- Is not owned by a foreign person, directly or indirectly, wholly or partially
- Has not experienced any change in ownership in the preceding 12-month period
- Has not sent or received any funds in an amount greater than $1,000…
- Does not otherwise hold any assets
FinCEN Identifies Number
Any individual and a reporting company may obtain a FinCEN identifier and use the number in its report in lieu of the information required to be reported
