Corporate Transparency Act

IMPORTANT NOTICE TO ALL DCM CLIENTS

This post serves to notify our clients of a significant change in federal law that will impact nearly everyone operating a business through a legal entity such as a corporation, limited liability company, limited partnership, or other similar entity.

The Corporate Transparency Act (CTA) went into effect on January 1, 2024. The CTA requires certain entities that meet the CTA criteria of a “reporting company” to file certain reports with Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) disclosing the identity and certain personal information of the “beneficial owners” and “company applicants” of such entities. Failure to comply with the reporting requirements under the CTA could result in a $500 per day penalty (up to $10,000) and/or imprisonment up to 2 years.

FinCEN began accepting initial beneficial ownership information (BOI) reports electronically on January 1, 2024.  All reporting companies created or registered before January 1, 2024, are required to report to FinCEN by January 1, 2025. Reporting companies created or registered on or after January 1, 2024, are required to report to FinCEN within 90 calendar days of receiving an actual or public notice from the secretary of state or similar office that the company has been created or registered. Reporting companies created or registered on or after January 1, 2025, are required to report to FinCEN within 30 calendar days of receiving an actual or public notice from the secretary of state or similar office that the company has been created or registered. If at any time a reporting company discovers an inaccuracy in a previously filed report, or if there is a change to previously reported information, the reporting company must file an updated or corrected report with FinCEN within 30 calendar days.

Additional information about the reporting requirements, including answers to questions such as “who is a reporting company” and “who is a beneficial owner”, is available on FinCEN’s beneficial ownership information webpage https://fincen.gov/boi

Please be advised that DCM will not be reporting the required information to FinCEN on a client’s behalf unless specifically engaged to do so under a separate written engagement agreement. THEREFORE, UNLESS OTHERWISE PROVIDED, THE RESPONSIBILITY TO ENSURE COMPLIANCE WITH THE CTA, INCLUDING THE INITIAL BOI REPORT DUE, FALLS EXCLUSIVELY ON EACH CLIENT.  If you wish to engage our firm for advice or services related to the CTA, we highly recommend that you immediately contact us to discuss a separate written engagement agreement for such services.