Although the Corporate Transparency Act (CTA) does not require reporting companies to disclose required information about beneficial owners and applicants to FinCen until after December 31, 2021, there are important actions reporting companies should take now to prepare to satisfy their FinCen reporting obligation.

Pre 1/1/22 CTA Actions Reporting Companies Should Take Now

1. Subscribe to our free CTA newsletter to keep up to date on the CTA, its regulations and other important issues related to the CTA.

2. The reporting company should identify all of its beneficial owners and notify them as to the existence of the CTA and the requirement that the company disclose the required information for all beneficial owners.

3. The reporting company should collect the required information from all beneficial owners.

4. If the reporting company is a limited liability company it should cause the members to become obligated to deliver to the company before the FinCen filing deadline all of the required information.  This should be done by adding language to the LLC’s Operating Agreement that notifies the members of the CTA required information, obligates them to provide the information by a specific date and fines them for failing to deliver all of the required information by the company’s deadline.  If you have an LLC, you should purchase for $97 our CTA Operating Agreement text in Word format that you can insert into your company’s Operating Agreement or into an amendment to its Operating Agreement.

5. If the reporting company is a corporation you should try to get all of the beneficial owners to sign a Stockholders’ Agreement that obligates them to deliver all of the required information to the corporation before the FinCen filing deadline.

6. The reporting company should collect all of the required information as soon as possible and prepare to file it with FinCen on or before the due date of the report.  We won’t know exactly when reports are due until the CTA regulations become final.  For reporting companies formed before January 1, 2022, the required information is due not later than two years after the CTA regulations become final.

7.  Because of the $500/day penalty and potential criminal penalty a reporting company must have a process to verify the information given to it by beneficial owners and applicants.  You can’t just ask beneficial owners to send you an email with the required information.  What if the submitted information is incorrect?  What if the beneficial owner lies to you?  You need to buy our editable Word CTA Affidavit that contains the required information, is signed by the beneficial owner before a notary and notarized.  Our affidavit requires the beneficial owner to attach an Exhibit to the Affidavit that is a photocopy of the identification document from which the unique identifying number was taken.  Our Affidavit also contains a representation and warranty by the beneficial owner that the information contained in the Affidavit is true and correct and may be reported to FinCen.  When you buy our Affidavit for $47 you get two editable Word Affidavits, one for a person and one for an entity.

Post 12/31/21 CTA Actions Reporting Companies Should Take

1. If your reporting company was formed before January 1 2022, file all of the required information with FinCen not later than the filing deadline, which is not later than two years after the CTA regulations become final.

2. If your reporting company was formed after December 31, 2021, arrange before the company is formed to collect the required information from all beneficial owners and the applicant.

3. If your reporting company was formed after December 31, 2021, file all of the required information with FinCen not later than the due date stated in the regulations promulgated under Section 5336.  The regulations have not yet been proposed or finalized.

4. All beneficial owners should apply for and obtain a FinCen identifier to facilitate their FinCen filings.