Corporate Transparency Act

Dear Valued Client,

We hope this letter finds you well. We are writing to inform you about the Corporate Transparency Act (CTA), a significant piece of legislation that may impact your company's operations and reporting requirements. Below, you will find essential information regarding the CTA, including its history, applicability, and reporting obligations.

The Corporate Transparency Act, enacted in January 2021, aims to enhance transparency in corporate ownership to combat illicit activities such as money laundering, terrorism financing, and tax evasion. As part of this effort, certain companies are now required to disclose their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.

You may wonder why you are only hearing about this now, given that the law was enacted in 2021. The compliance reporting under the act was delayed until 2024, requiring completion by December 31st, 2024, for entities formed before January 1st, 2024. Entities formed in 2024 are mandated to report within 90 days of formation.

Who must engage in this reporting? Unless exempt, all corporations, partnerships, LLCs, disregarded entities, and those similarly created under state and local law are obligated to comply. Exemptions encompass publicly traded entities, certain financial institutions, and those already under federal oversight. Additionally, a large operating company, meeting the following criteria, is exempt:

      • Twenty Full-Time employees
      • Physical Presence in the United States
      • Gross Receipts exceeding $5,000,000 annually

The act stipulates that entities not meeting exemptions must report the following information:

1. Reporting Company’s
      a. Full Legal Name
      b. Trade Names
      c. US Address
      d. State of Formation
      e. IRS EIN

2. For Each of the Entity’s Beneficial Owner(s)
      a. Full Name
      b. Date of Birth
      c. Current Address
      d. Image of one of the following jurisdictional documents:
            i. US Passport
            ii. States Driver’s License

Following the initial reporting, it is imperative to update records whenever there is a change of address for the entity or beneficial owner, or additions/subtractions to the beneficial owners. Failure to report or make changes may result in significant penalties, including fines and imprisonment. Currently, there is ongoing litigation challenging the constitutionality of this act, and only those attached to the lawsuits are impacted by this.

Our firm is committed to assisting you in understanding and complying with this act. We offer our services to complete this reporting on your behalf before the deadline. Please note that there will be an additional fee for these services - $300 per entity and $100 for each beneficial owner. These rates are applicable through October 31, 2024. After that time, the fees are subject to an increase.

If you wish to engage our firm to work with you on this matter, please fill out the form below to indicate your interest. We will then provide you with our full engagement letter. Alternatively, if you plan on handling the reporting yourself, please indicate so in the form below. Please let us know your decision by July 15, 2024.

Should you have any further questions or require additional information, please feel free to contact our team at your convenience.

Your Trusted Firm,

Perlson LLP

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