Important Updates on Corporate Transparency Act for 2024

The Financial Crimes Enforcement Network (FinCEN) recently released important updates regarding the Corporate Transparency Act (CTA). This act aims to increase transparency and combat illicit financial activities by requiring businesses to disclose beneficial ownership information.

Read on to see what this may mean for you and your business.

Key Points from the Update: 

1. Reporting Requirement for All Entities: Any business, regardless of when it was formed, must file a beneficial ownership information report (BOIR) before finalizing the termination process. This applies even if the business shuts down before its BOIR filing is due or if a company was administratively dissolved.
2. Exemption for Pre-2024 Business Terminations: If your business did not legally exist before January 1, 2024, you are not required to file a BOIR. This means all formal dissolution steps must have been completed before January 1, 2024, including filing necessary paperwork with the Secretary of State and liquidating assets.
3. Administrative Dissolution: Companies that are administratively dissolved but not permanently dissolved must follow the BOIR filing requirements until the dissolution becomes permanent.
4. Entities Owned by Indigenous Tribes: There are specific guidelines that apply to entities fully or partially owned by an Indigenous Tribes. These entities may be exempt from BOIR requirements or may have unique reporting obligations.

To ensure compliance with the new regulations, file your BOIR before dissolving your business. Additionally, stay informed by reviewing FinCEN’s FAQs, which provide the latest guidance to help you fully understand your obligations under the CTA.

Staying compliant with legal requirements is important to avoid penalties and legal consequences that can arise from non-compliance. It also ensures the integrity of your business operations and helps maintain trust with U.S. regulatory bodies.

Shutting down a business is complex, but understanding and following these updated requirements can help you avoid unnecessary complications. At Starcycle, we're here to support you through every step of this process.

If you would like additional support, book a free consultation with us.