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Dear Friends,
The newly enacted federal Corporate Transparency Act (CTA) went into effect on January 1, 2024. Under the CTA, many privately held companies will be required to submit certain information to the federal government that was not previously required about business and holding company entities and any persons identified by the law as “beneficial owners” of such entities—defined as persons who hold a 25% or more ownership interest or who exercise substantial control. Entities in existence before January 1, 2024, have until January 1, 2025, to report. We expect that more details will become available after the reporting process begins in 2024.
While many business regulations apply only to large entities, the CTA targets smaller entities. Your entity may be subject to the CTA unless it is a business that falls under a stated exemption. For example, an entity may be exempt from the reporting requirements if it is a business in one of the larger, heavily regulated industries or if it is simply a business that employs more than 20 full-time employees, has more than $5 million in gross receipts or sales, and has a physical office in the United States. If you have an entity, for example, that simply holds real estate or investments, you may be required to comply with the CTA because the CTA also covers entities without any business operations.
We are developing a list of new independent service providers to assist clients with the administrative aspects of reporting to the federal government that we plan to make available after we have seen these service organizations in action. You may also visit this website for FAQs regarding the CTA.
In the meantime, if there is anything we can assist you with as it pertains to the CTA, please let us know.
Sincerely,
Herb
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