Recognizing the novelty of the Corporate Transparency Act, FinCEN is proposing to give new entities more time to file beneficial ownership reports.
Under the law, entities formed on and after January 1, 2024, would have 30 days after formation to file their report. If FinCEN’s rule is adopted, then that deadline would be expanded to 90 days after formation. The deadline would snap back to 30 days for any entity formed on or after January 1, 2025.
The Corporate Transparency Act represents a new paradigm in corporate law. For the first time, U.S. businesses are required to report their ownership and management information. FinCEN estimates there will be 32.6 million reporting companies under the new law.
In another attempt to reach and reassure businesses, FinCEN published a Small Entity Compliance Guide earlier this month. This guide contains useful information concerning company applicants. It indicates that FinCEN’s portal for accepting beneficial ownership reports will not be running until January 1, 2024. The fact that the filing system is still under construction could be another reason for pushing out the deadline from 30 days to 90 days in the first year of its implementation.
Cavitch is actively advising its clients on the implications of the Corporate Transparency Act and how to avoid unnecessary compliance costs, risk, and disclosure. Contact Michael Rasor for more information at 216-621-7860.