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Updated 12/26/24

Who Needs to Report: Small businesses like LLCs, limited partnerships, and corporations with less than 20 employees are likely required to comply. 

 Penalties for Noncompliance: Failure to comply can lead to a $591 per day penalty, and criminal penalties may include a fine up to $10,000 and/or imprisonment. 

 Reporting Company Definition: Corporations, LLCs, LLPs, and similar entities registered with the Secretary of State, except trusts and general partnerships. 

 Exemption Criteria: Companies with over 20 full-time employees in the U.S., over $5M gross revenue, and a physical U.S. office. All three conditions must be met to be considered exempt.

 Information to Report: Includes legal names, birth dates, addresses, and identification details of beneficial owners and company applicants, along with the company's legal name, DBAs, tax ID, business address, and formation jurisdiction. 

 Effective Dates:

• Existing businesses must report by January 13, 2025.

• Entities formed after December 3, 2024, are granted 21 extra days from their initial deadline. 

• For entities formed on January 1, 2025, or later, the requirement is 30 days from the effective date of their creation.

 Updates and Corrections: Changes or inaccuracies must be reported within 30 days of discovery. 

 Definition of Beneficial Owner: An individual with substantial control or at least a 25% ownership interest, including through contracts, arrangements, or relationships. 

 OUR RECOMMENDATION: This is intended only to give you a brief overview. We understand that interpreting or advising on the CTA is considered practicing law, and we therefore recommend you contact your attorney for advice and assistance. 

 

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 Disclaimer: Tzinberg & Associates provides this communication for general guidance only. It does not constitute tax advice, accounting services, investment advice, or professional consulting. Consult a professional adviser before making decisions or acting, as the information is provided "as is" without any warranties regarding its completeness, accuracy, or timeliness.