Attention founders! Starting January 1, 2024, you need to disclose certain information about ownership your startup to the Federal Government, no matter where your startup was incorporated.

In an attempt to address using shell companies to launder money or perpetuate financial crimes, Congress passed the Corporate Transparency Act (”CTA”) that takes effect on January 1, 2024. Under the CTA, all limited liability entities registered in the US are required to file reports with the Federal Financial Crime Enforcement Network (”FinCEN”) with information relating to “beneficial owners” and “company applicants” of the entities.

Beneficial owners, under the CTA, are individuals who directly or indirectly (1) exercise substantial control of a company, or (2) own or control at least 25% of ownership interest in the company. Company applicants, under the CTA, are individuals who file or help prepare reporting documentations for a company.

Failure to comply this reporting requirement can result in severe penalties, including a civil fine of up to $500 per day and criminal fines of up to $10,000 and/or imprisonment.

You can find more information here: https://fincen.gov/boi. If you have further questions on your reporting obligations, please consult an attorney.

Tags: #corporation, #reporting_req