REFRESH: What Nonprofit Leaders Need To Know About the Corporate Transparency Act

Welcome to EO Radio Show – Your Nonprofit Legal Resource. Episode 104 is a refresh of episode 57, released in October 2022, which addressed the implications of the Corporate Transparency Act for nonprofit organizations, especially those with complex corporate structures that involve business enterprises with outside for-profit investors.

In 2021, Congress established a sweeping and perpetual dragnet to aid in the policing of domestic money laundering by passing the Corporate Transparency Act, which went into effect on January 1, 2024. The CTA directs the United States Treasury Department's Financial Crimes Enforcement Network (FinCEN) to establish and maintain a national registry of beneficial owners of every legal entity formed or registered in the U.S. With certain exceptions, these entities are referred to as reporting companies. The CTA requires reporting companies to make initial and updated disclosures of information relating to the individuals who beneficially own and control the reporting company.

Farella partner Greg LeSaint joined me to outline the CTA provisions and walk us through the Farella Braun + Martel Corporate Transparency Act guide, which may help you determine whether an entity in your organization is indeed a reporting company and subject to the CTA's disclosure requirements.

When we recorded episode 57, we discussed the original filing deadline for new organizations formed in 2024. There was going to be a 30-day window in 2024 to make any filings for a newly formed company, and Greg noted at the time that there were proposals to extend that to 90 days, which is what happened. So, as you listen to the "refresh," note that the deadline for new organizations formed in 2024 is, in fact, 90 days, not the original 30, but starting January 1, 2025, the filing deadline for organizations reverts to 30 days for the new organizations formed in 2025 and thereafter.

Most importantly, for all reporting companies formed before 2024, the deadline for filing with FinCEN is January 1, 2025, which is right around the corner. This "refresh" of episode 57 will provide information to set listeners on the right track for determining which entities are reporting companies and which are exempt.

Show Notes:

Greg LeSaint, Farella Braun + Martel

Farella Corporate Transparency Act Guide

Farella YouTube podcast playlist

If you have suggestions for topics you would like us to discuss, please email us at [email protected]. Additional episodes can be found at EORadioShowByFarella.com.

DISCLAIMER: This podcast is for general informational purposes only. It is not intended to be, nor should it be interpreted as, legal advice or opinion.