Complying with the Federal Corporate Transparency Act may surprise many Florida Corporations, including many Condominium and Homeowner Associations. In 2021, as part of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, the Federal Government passed a Federal law called the Corporate Transparency Act (the “CTA”).
Navigating Compliance: Who Must Adhere to the Corporate Transparency Act?
As part of the CTA, Congress made the Financial Crimes Enforcement Network (“FinCEN”), a division of the United States Department of Treasury, the governmental agency responsible for the administration and enforcement of this new law. It is clear from the language of the legislation that all corporations, limited liability companies, or other similar entities (“Corporate Entities Corporate Entity”) must comply with the CTA unless they qualify for an exemption.
Exemptions Under the Corporate Transparency Act: Are You Covered?
There are 23 types of exemptions identified in the CTA. A complete list of exemptions can be found at https://www.fincen.gov/boi. If a Corporate Entity does not qualify for one of the specified exemptions, it is considered a “reporting company.” As such, the Corporate Entity, including Condominium Associations, Homeowner Associations, or Cooperative Associations, will have to report its beneficial ownership information to FinCEN, pursuant to the requirements of the CTA.
Defining ‘Beneficial Owner’ in the Context of the Corporate Transparency Act
A “beneficial owner” is an individual who either directly or indirectly: (1) exercises substantial control over the reporting company, or (2) owns or controls at least 25% of the reporting company’s ownership interests.” Clarifying information regarding control and ownership can be found at https://www.fincen.gov/boi.
Compliance Deadlines and Procedures for the Corporate Transparency Act
The deadline set for initial reporting compliance is January 1, 2024. At that time, FinCEN will start taking reports from the reporting companies as required by the provisions of the CTA. Specific deadlines for reporting can be found at https://www.fincen.gov/boi.
How New and Existing Companies Can Comply with the Corporate Transparency Act
Companies existing before January 1, 2024, will have until January 1, 2025, to file their initial beneficial ownership information report with FinCEN. Companies created on or after January 1, 2024, will have thirty (30) calendar days from the date they receive notice of their creation or their registration becoming effective within which to file their initial beneficial ownership information reports with FinCEN (extended by FinCEN on November 29, 2023, to 90 calendar days). Companies created on or after January 1, 2025, will have thirty (30) calendar days to file their initial beneficial ownership information reports with FinCEN.
Penalties for Non-Compliance with the Corporate Transparency Act
Failure to comply with the CTA beneficial reporting requirements may result in civil or criminal penalties. Senior officers of the entity may be held responsible for such failure to report properly.
Please note that this blog is for general informational purposes only and is not intended to provide legal advice. For more details on the requirements of complying with the provisions of the Corporate Transparency Act, please contact your attorney or go to https://www.fincen.gov/boi.
