Corporate Transparency Act – Upcoming Changes and Deadlines

As a follow up to our blog post entitled “Corporate Transparency Act Overview” on July 18, 2024, today’s post focuses on some specifics about the Corporate Transparency Act that business owners will need to know as we enter into the final quarter of 2024.

Changes to Due Date for Initial Report for New Business Entities

The Corporate Transparency Act (“CTA”) took effect on January 1, 2024 and mandates that all businesses deemed to be reporting entities that are formed in calendar year 2024 will have 90 days to file a beneficial ownership information report (“BOIR”). Beginning on January 1, 2025, all businesses formed in calendar year 2025 and thereafter will have a slim 30 days to file the BOIR.

The BOIR requires that a valid form of identification, such as a passport or a state issued driver’s license, be submitted for each individual who is deemed to be a beneficial owner of the business. Prospective business owners should be mindful of the 30 day window and be sure that personal identification documents are valid and unexpired. The 30 day window generally begins on the date the articles of incorporation or organization are effectively filed with a state’s bureau of corporations.

January 1, 2025 Due Date for Existing Businesses

The Corporate Transparency Act mandates that all businesses deemed to be reporting entities that were formed prior to 2024 must file a BOIR by January 1, 2025. This mandate will apply to millions of businesses, both foreign and domestic, that conduct business in the United States and the lookback period to the business entity’s formation is unlimited. Meaning, whether a business was formed in 1962 or 2022, if it is still operating today, it likely has a filing requirement.

Dissolved and Inactive Entities

Those entities which have been formally dissolved with the state’s bureau of corporations in the jurisdiction in which it was formed prior to 2024 are not required to file. The CTA also accounts for “inactive” businesses that have not been formally dissolved. There is a specific set of fact scenarios that the CTA has set forth, all of which must apply to the entity, for the entity to be deemed inactive and therefore exempt from filing the BOIR.

If you would like assistance with filing a BOIR for your business or need help with determining whether or not an entity is exempt from filing, please contact a Mavacy legal professional.