 Dear Valued Clients and Friends, Earlier this year, we sent an email regarding the changes in beneficial ownership information reporting for small businesses, which took effect on January 1, 2024. These changes are part of the Corporate Transparency Act (“CTA”) and require many U.S. companies to report information about their beneficial owners (i.e., the individuals who ultimately own or control the company). We are reaching out again because the deadline for companies formed before 2024 to comply with the CTA is approaching. CTA Implementation Dates The CTA is a complex initiative for U.S. businesses, so there is a phased approach to its implementation: – Companies formed during the calendar year 2024 are required to comply with the new information requirements within 90 days of their formation. – Companies formed before calendar year 2024 are required to comply by January 1, 2025. Who is a Beneficial Owner? A beneficial owner is a person who, directly or indirectly, has significant control over a company. This can include someone who: – Owns more than 25% of the company’s equity. – Holds a controlling interest in the company. – Exercises significant control over the company’s management or policies. Affected entities include existing and newly formed corporations, limited liability companies (LLCs), limited partnerships, and other entities that file formation papers with a state’s Secretary of State’s office (or similar government agency). Given the upcoming deadline for CTA compliance, we are following up to ensure you are aware of your obligations. Do not wait until the last minute to address this important matter. Potential Penalties Failure to comply with the CTA can result in serious consequences, including criminal fines of up to $10,000 and imprisonment for up to two years, as well as civil penalties of up to $500 per day. For a more detailed guide, please consult the FinCEN website: www.fincen.gov/boi. Some items of importance include determining if your entity is affected, who is a beneficial owner, and what type of information to report. Please note that we are not providing this service as part of our annual tax return preparation and tax consulting services. If you would like assistance with this filing, we may do so under special agreement. Please contact your Duffy Kruspodin advisor if you have any questions. Sincerely,  DUFFY KRUSPODIN, LLP |
