It’s coming down to crunch time on the Corporate Transparency Act. Passed as part of the National Defense Authorization Act for 202, it requires companies to submit a report of their beneficial ownership and control to the U.S. Department of the Treasury’s Financial Crimes and Enforcement Center. For new companies, this information has to be submitted at the time of formation. Existing companies will have to submit this information during 2024.
Originally, at the time of formation meant within 30 days. FinCEN just announced that it will be extended for 90 days during 2024.
I understand why FinCEN is looking for reporting on entities formed in the US. As numbered Swiss bank accounts and offshore Cayman Island trusts are falling into line with prudential KYC-ALM laws, it’s the United States that makes it really easy to create a company and not disclose ownership or control.
I don’t think FinCEN is ready to make it easy to disclose the information required by the Corporate Transparency Act. I’ve heard there are concerns about whether the new database can handle the crush of information. I’ve worked with a few vendors trying to help with solutions for filing but haven’t had the ability to access a prototype of the FinCEN database.
It’s great that the initial deadline has been extended from 30 days to 90 days. Good luck to those brave souls who are going to be the first to file after January 1, 2024.
Sources: