Starting January 1, 2024, the US federal Corporate Transparency Act mandates millions of corporate entities to register their beneficial owners with the Financial Crimes Enforcement Network (FinCEN) at the US Department of the Treasury.
While most non-profit bodies and trusts have exemptions from reporting obligations, some may be subject to regulations. The exemption doesn't apply to entities with pending tax exemption applications at the IRS. Entities formed after July 1, 2024, must comply within 90 days. Newly formed non-profits are unlikely to secure tax-exempt status before the filing deadline due to IRS processing delays.
Non-profits created before January 1, 2024, have a year to comply, but may face challenges if tax exemption is temporarily revoked. Failure to report on time can result in fines and jail time.
Trust exemptions are limited to non-statutory trusts, but they could be affected if they have interests in regulated companies. The Act's broad 'substantial control' test means individuals making key decisions may be deemed beneficial owners. Trustees may have new information gathering responsibilities. Questions linger about the Act's scope, such as whether an individual trustee overseeing multiple trusts is a beneficial owner.
Uncertainties also exist with multiple beneficiaries or individuals benefiting from several trusts with ownership or control over a reporting company.
If you require assistance in relation to the above and/or would like to discuss anything further, please do not hesitate to contact firstname.lastname@example.org or your usual A.C.T. contact.