New Federal Rule: Reporting Beneficial Owners for U.S. Entities

Effective January 1, 2024, the U.S. Corporate Transparency Act (CTA) requires certain entities created or registered to do business in the United States to report information about their beneficial owners, senior officers, and control persons to the U.S. Treasury Department, unless an exemption is available. The reporting requirement (i) is currently applicable to entities newly created or registered to do business on or after January 1, 2024, and (ii) takes effect on January 1, 2025, for reporting companies that were created or registered to do business before January 1, 2024.

The Treasury Department has provided some guidance, often in the form of “frequently asked questions” (FAQs), on the reporting obligations and exemptions from reporting that may be available. While these FAQs are helpful, there are still areas where application of the CTA, or the FAQs, is unclear and requires application of legal judgment.

We continue to monitor closely developments related to the implementation of beneficial ownership information reporting requirements under the CTA. Our multidisciplinary taskforce would be pleased to discuss their application to the facts and circumstances of any particular legal entity and/or ownership structure within your organization.