On January 1, 2021, Congress enacted the Corporate Transparency Act (“CTA”), which requires that certain “reporting companies” report their (i) beneficial ownership information (“BOI”) as well as (ii) “company applicant” to the Financial Crimes Enforcement Network (“FinCEN”), an agency of the Department of Treasury. Partner Elitsa Dimitrova, shares more on the proposed rules and what this will mean for small companies.
Under the CTA, over 25 million small companies in unregulated industries in the U.S. will need to report to FinCEN information regarding certain substantial beneficial owners and company applicants. Large operating companies and companies in heavily regulated industries will be exempt from reporting. The regulations are in the process of being finalized and we are expecting that this part of the rules will come into effect later in 2022. Freeborn has submitted comments to FinCEN requesting clarification on certain topics and will continue to provide updates.
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