This new federal law concerns corporations, limited liability companies, limited partnerships, statutory trusts, and any other entities created by a filing with a secretary of state.
The Act covers all entities that were formed in or are registered in any state or the District of Columbia, whether formed in the U.S. or elsewhere, with exceptions for tax-exempt entities, inactive entities and 21 other enumerated entities.
The Act requires filing information about owners and applicants (filers of formation documents) of entities formed after 2023 and about owners of entities formed before 2024.
Although common law trusts are themselves exempt, they may have reporting requirements if they own or control an entity.
The information is filed with FinCEN (Financial Crimes Enforcement Network), an arm of the U.S. Treasury Department.
All entities formed after 2023 must file the owner and applicant information with FinCEN within 90 days of formation.
All entities formed before 2024 must file the owner information with FinCEN by Jan. 1, 2025.
All entities have a continuing duty to update this information with FinCEN if previously reported information changes, for example, due to a change in ownership or control.
Failure to comply can result in civil penalties of $500 per day, criminal fines of up to $10,000, and up to two years imprisonment.
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