Have you heard of the Corporate Transparency Act? In fact, the Corporate Transparency Act (CTA) is set to go into effect on January 1, 2024. What does this mean? This Act represents a significant shift in the way reporting companies in the United States must disclose their beneficial ownership information. In our Florida estate planning law firm we are very aware how critical it is to both understand the implications of this Act and share this with our clients, especially in regard to business succession, mergers, acquisitions, and the administration of estates.

With all that stated above, it is important to understand that the CTA aims to curb illegal activities like money laundering, tax evasion, and financing of terrorism by enhancing transparency in the ownership of legal entities. It mandates the disclosure of beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN).

You need to know and understand that the following key compliance dates: 

  • Existing Entities. For reporting companies in existence as of the effective date, January 1, 2024, the initial reporting deadline is within one year.
  • New Entities. Companies created or registered after the effective date must file their initial reports within 30 days of their creation or registration. 
  • Notably, FinCEN has proposed extending this initial filing deadline to 90 days for entities established in 2024.

Will there be required information to be reported? Right now, we understand that the CTA requires the following information for each beneficial owner and company applicant:

  • Full legal name.
  • Date of birth.
  • Residential street address.
  • Unique identifying number and issuing jurisdiction from a government-issued identification document (e.g., US driver’s license, US or foreign passport).
  • An image of the document that shows the unique identifying number.

Will there be more than just the initial reporting? Yes, it is important to note that reports must be updated within 30 days in the following scenarios:

  • Change in beneficial ownership (e.g., through sale, merger, acquisition).
  • Death of a beneficial owner.
  • Discovery of inaccuracies in previously filed information.

For Florida estate planning attorneys, the CTA has multiple implications including:

  • Considerations related to succession planning. In other words, when a business is part of a Florida estate plan, the change in ownership due to the death of a beneficial owner will necessitate a timely update under the CTA.
  • For clients involved in mergers or acquisitions, due diligence that ensures compliance with CTA reporting is vital.
  • The sensitive information required by the CTA may raise privacy concerns, necessitating discussions about data security and privacy measures.

In our Florida estate planning law firm we know that the Corporate Transparency Act introduces significant changes in reporting requirements for legal entities. Therefore, it is important to stay abreast of these changes and guiding our Florida estate planning clients through compliance is essential for us at this time and we look forward to answering your questions. Understanding and preparing for the CTA’s implications will be crucial in ensuring that your Florida estate and business planning strategies remain compliant and efficient.

We know this article may raise more questions than it answers. At Perlin Estate Planning & Probate our credentials enable us to provide a multi-disciplinary approach to our legal services.  By building relationships with our clients, we are also able to understand each client’s needs and desires, and we support such goals through thoughtful, comprehensive planning techniques. We encourage you to contact us and schedule a meeting.