Anonymous No More: Compliance with The Corporate Transparency Act (the “CTA”)

On January 1, 2024, the federal Corporate Transparency Act (the “CTA”) goes into effect. The CTA requires most business entities (certain exemptions do exist) to report their beneficial owners and company applicants through the Beneficial Ownership Secure System (“BOSS”).  

A beneficial owner is defined as any individual who holds a 25% ownership interest in the entity, either directly or through another entity in which they hold an interest, as well as any individual who exercises substantial control over the entity regardless of his/her ownership interest. For purposes of identifying ownership interests, even rights to future ownership interests must be included (ex. stock options, convertible interests, voting rights, etc.). A company applicant is the individual(s) who actually filed the entity’s formation documents and the person who directed or controlled the filing. 

The CTA requires that the following information for each entity be reported in BOSS: 

• Full legal name 

• DBA or alternate name 

• Complete current US address 

• Jurisdiction of formation or first US registration (if formed as foreign entity) 

• IRS Taxpayer Identification Number (EIN) 

The CTA requires that the following information for each beneficial owner of the entity be reported in BOSS: 

• Full legal name 

• Date of birth 

• Complete current residential street address, except company applicants acting the course of their business can use their business address 

• Unique identifying number and issuing jurisdiction from, and image of, one of the following: 

• US Passport; 

• State driver’s license; 

• Identification document issued by a state, local government, or tribe; or 

• If a foreign individual without any of the above documents, then a foreign passport 

If your entity was formed prior to January 1, 2024, the entity will have one year to register in BOSS. For any entity formed between January 1, 2024 and December 1, 2024, the entity will have 90 days to register in BOSS.  Any entity formed after January 1, 2025 will have 30 days to register in BOSS. 

Importantly, if any information previously provided for either the entity, the beneficial owners, or the company applicants changes or was inaccurate, then the information must be updated in BOSS within 30 days of such change.  This includes a change of address, change in ownership, change in identifying documents, etc. 

If you would like to retain NextGen Counsel LLC to confirm your entity’s obligation to report through BOSS and/or to fulfill your entity’s reporting obligations, please contact Michael H Ansell, Esq., via email or telephone, to discuss retaining NextGen Counsel LLC. 

Information contained in this post is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular situation, we urge you to consult with Michael H Ansell, Esq., or other competent legal counsel. 

NextGen is not engaged in the providing of tax advice.  NextGen does not offer, nor profess to provide any information or advice regarding the application or impact of federal, state, or local tax statutes, regulations, ordinances, guidelines, advisory opinions or other requirements or information provided by governmental agencies and authorities.  NextGen strongly recommends that you consult with your tax professional regarding the applicability and impact of the foregoing.  

Disclaimer:

Information contained in this post is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the with Michael H. Ansell, Esq., or other competent legal counsel.