Seattle Corporate Transparency Act Attorneys
In recent years, the United States government has taken important steps to root out business corruption. One such measure is the passage and enforcement of the Corporate Transparency Act (CTA). While the CTA’s aim is positive, many businesses must now rush to comply with it.
At Prime Legal, our lawyers can help business entities in the Seattle area get in compliance with the CTA. We encourage you to reach out to us if you have questions or concerns about ensuring your business satisfies its requirements.
What Is The Purpose Of The Corporate Transparency Act (CTA)?
The CTA, which went into effect in January 2024, requires businesses operating in the United States to be transparent about their ownership structure. The act’s primary purpose is to identify shell companies that intentionally obscure their ownership structures; these companies often engage in illegal business practices like corruption, financing of terrorism, fraud, money laundering and tax evasion.
Who Does The CTA Apply To?
Both domestic and foreign businesses must comply with the CTA; for legal purposes, these entities are referred to as domestic reporting companies and foreign reporting companies. Specifically, business trusts, corporations, limited liability companies (LLCs), limited liability partnerships (LLPs) and other enterprises structured in similar manners must file reports that provide insight into their ownership.
Are There Any Exemptions To The CTA?
Some business entities do not need to report on their ownership structure. These include:
- Banks
- Domestic governmental entities
- Most publicly traded companies
To determine whether your business is exempt from the CTA, you will want to consult a business law attorney. With their knowledge of the act, they will have an accurate understanding of its application where your specific circumstances are concerned.
Does The CTA Apply To Nonprofits?
The CTA does not distinguish between for-profit and nonprofit entities, hence any nonprofit that meets the definition of a reporting company will have to file a report. A non profit organization may be exempt from reporting requirements if it falls within one of the exceptions. A failure to comply can result in substantial monetary penalties and even possible imprisonment.
Who Does The CTA Focus On?
The CTA’s primary focus is on beneficial owners, individuals who own at least 25% of a business entity or who have a significant say in its operations. Per the CTA’s requirements, all beneficial owners of a business entity must be identified through reporting.
What Are The CTA’s Disclosure Requirements?
Under the CTA, all owners of nonexempt business entities must report the following things:
- Full legal name
- Date of birth
- Current business or residential address
- Unique identification number (i.e., driver’s license number, passport number or social security number)
Business owners could face stiff penalties for failing to report this information. These penalties could be either criminal or financial in nature – or both.
When Do The CTA Reporting Requirements Come Into effect? How Long Does An Entity Or Organization Have To Comply With The CTA?
The reporting requirements under the CTA came into effect on January 1, 2024. Entities and organizations formed prior to such date have until January 1, 2025, to comply with the CTA’s reporting requirements. Any reporting entity or organization formed on or after the effective date and before January 1, 2025 will have 90 calendar days to submit an initial beneficial ownership information (BOI) report. Entities or organizations formed thereafter will have 30 calendar days to submit their initial BOI report.
Prime Legal Can Answer Your CTA Questions
If your business is facing penalties for CTA noncompliance – or if you want to make sure it is following reporting requirements – our business law attorneys are willing to help you out. Our team is accessible 24/7, and you can schedule a consultation with us at any time. Contact us today by email or by phone at 206-536-3009.