Navigating the Path to Transparency: Current Status of U.S. Corporate Transparency Act Timeline

The Corporate Transparency Act (CTA) holds immense potential in promoting fairness and combating illicit activities within the business world. Enacted in 2020 as part of the National Defense Authorization Act for Fiscal Year 2021, this legislation sets a new course for corporate transparency. Although the CTA's effective date is set for January 1, 2024, the journey towards establishing the final rules necessary for full implementation has encountered its fair share of delays and challenges. 

Overview of the CTA Rulings Timeline to Date:

January 2021: A significant milestone was reached as the CTA became part of the Anti-Money Laundering Act of 2020, contained within the National Defense Authorization Act for Fiscal Year 2021. This legislation mandates that companies disclose their beneficial ownership information (BOI) to a non-public government database maintained by the Financial Crimes Enforcement Network (FinCEN).

December 2021: FinCEN took a pivotal step forward by releasing the proposed Beneficial Ownership Information (BOI) reporting. This marked the first of three rulemakings planned for the implementation of the CTA. The subsequent rule will determine who may access BOI, for what purposes, and the safeguards necessary to protect this information. Lastly, the third rule will revise FinCEN's customer due diligence rule after the finalization of the BOI reporting rule.

September 2022: FinCEN published the Final Rule on Beneficial Ownership Reporting (BOI), providing initial guidance on compliance obligations by  identifying who is required to report what and when. This final rule sets the filing period for initial reports to 30 days for reporting companies created or registered in 2024.

December 2022: FinCEN released the second proposed rule, outlining the access protocols for authorized users of Beneficial Ownership Information (BOI). Stakeholders were given the opportunity to submit written comments on the proposed rule until February 14, 2023.To date, a final rule has not been published.

March 2023: FinCEN published BOI FAQs to address frequently asked questions on the reporting requirements.

September 2023: This month was notably active with updates. FinCEN released a Compliance Guide aimed at assisting small businesses in determining their obligation to report beneficial ownership information. Later in the month, and one year after the Beneficial Ownership Information (BOI) Final Rule was published, FinCEN proposed an amendment to its final BOI Reporting Rule. This proposed change allows companies created or registered in 2024 a 90-day window, instead of the initial 30 days, to file their initial reports. According to proposed rulemaking, no other modifications will be made to the final BOI Reporting Rule. 

Additionally, comment requests have been issued for the Beneficial Ownership Information Reports(BOIR) and individual FinCEN Identifier Application forms. 

FinCEN also expanded their BOI FAQs, integrating several new questions and answers along with additional guidance regarding the extent of the reporting requirements and guidance for third-party service providers reporting assistance services. 

October 2023: The deadline to submit comments on the proposed reporting extension as well as on the above mentioned forms (BOIR and FinCEN Identifier) should be submitted by October 30, 2023. As of mid-October, the release of the second Final Rule is still pending.

November 2023: The proposed change to extend the filing deadline from 30 to 90 days has been confirmed. Reporting companies created or registered in 2024 will have 90 calendar days from the date of receiving actual or public notice of their creation or registration becoming effective to file their initial reports. FinCEN will not accept BOI reports from reporting companies until January 1, 2024—no reports should be submitted to FinCEN before that date.

December 2023: FinCen opened registrations for a virtual information session on beneficial ownership information reporting requirements on Wednesday, December 13. The demand for this webinar was so overwhelming that the registration closed within just a few hours of opening. Recognizing the high interest in this topic, FinCEN has announced plans to conduct additional webinars in the near future to accommodate the growing need for information and guidance on this important subject. These upcoming sessions are expected to provide further insights and clarifications on the compliance aspects of the Corporate Transparency Act.

January 1, 2024: The Corporate Transparency Act is expected to come into effect. 

By January 1, 2025: A third and final rulemaking is expected to be implemented. This final rule will revise FinCEN's existing Customer Due Diligence rule (2018).

How Athennian Can Help Companies Prepare for Compliance

With the upcoming Corporate Transparency Act (CTA) compliance deadline, businesses need to prepare efficiently. Athennian’s entity management platform offers a streamlined solution to navigate these complexities, ensuring timely and accurate compliance with CTA requirements, particularly for organizations with complex structures and numerous legal entities registered in the United States.With Athennian's assistance, companies can focus on their core business operations while confidently handling the requirements of the CTA.

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