Estrella Legal Alert – Corporate Transparency Act (CTA) Reporting Requirements

The Corporate Transparency Act (CTA), enacted on January 1, 2021, and effective January 1, 2024 (31 U.S.C. § 5336), requires certain entities to report their beneficial ownership information (BOI) and other information to the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). While exemptions to the CTA exist, the CTA’s application is intended to be broad, and its reporting requirements may principally impact small companies. Exemptions generally apply to large operating company entities or to those that are already highly regulated (for example, public companies, banks, and insurance companies).

This requirement applies to most entities in Puerto Rico.

The first reporting deadline under CTA is for new entities created or registered on or after January 1, 2024. Under FinCEN’s November 30, 2023, final rule, reporting companies must file their initial BOI report with FinCEN within 90 calendar days of receiving actual or public notice of their creation or registration becoming effective.

For existing entities created or registered before January 1, 2024, the deadline for reporting is by January 1, 2025. If created or registered on or after January 1, 2025, report must be filed within 30 calendar days of receiving actual or public notice of their creation or registration becoming effective,

Under the CTA, information that must be provided generally includes:

Personal information about:

• all individuals who either have substantial control (as defined under the CTA) over the company or own or control at least 25% of its ownership interests (as defined under the CTA); and
• for companies formed on or after January 1, 2024, the individual(s) who created the company or registered it to do business in the US (an applicant).
• Information about the reporting company itself.

The CTA also requires reporting companies to update their BOI report with any changes to previously reported information (including inaccuracies) within 30 calendar days of the change or discovery. Reporting companies will therefore need to have processes in place to timely identify and report the CTA’s required information, and to monitor changes to that information for ongoing compliance.

CTA filings will be made electronically through an online portal. FinCEN will maintain the reported BOI in a nonpublic database accessible only in certain circumstances by a limited number of authorized entities.

Our Corporate and Commercial team at Estrella LLC is preparing a detailed compliance process including reporting requirement analysis, handling of sensitive information and filing for interested clients. For more information on the CTA requirements and our CTA compliance process please contact us at cta@estrellallc.com .