New Reporting Requirements for Arizona Businesses Under Corporate Transparency Act

The United States Congress has passed the Corporate Transparency Act (CTA) to combat money laundering and terrorist financing. This Act mandates beneficial ownership reporting for corporations, limited liability companies, and similar entities registered in the United States. Entities formed or registered before January 1, 2024, must file an initial beneficial ownership report before January 1, 2025. Existing companies have one year to file; new companies must file within 90 days of creation or registration. 

The CTA is an expansion of anti-money laundering laws and is intended to help prevent and combat money laundering, terrorist financing, corruption, tax fraud, and other illicit activity. Congress believes bad actors frequently use corporate structures such as shell and front companies to hide their identities and move money through the U.S. financial system. 

The CTA was enacted on January 1, 2021, as part of the National Defense Authorization Act for Fiscal Year 2021. The CTA requires certain business entities (each defined as a “Reporting Company”) to file, in the absence of an exemption, information on their “Beneficial Owners” with the U.S. Department of Treasury’s available, but FinCEN is authorized to disclose the information under the following circumstances:

• To U.S. federal law enforcement agencies;
• With court approval, to certain other enforcement agencies;
• To non-U.S. law enforcement agencies, prosecutors or judges based upon a request of a U.S. law enforcement agency; and
• With the consent of the Reporting Company, to financial institutions and their regulators. 

Finer points to this Act exists if you are a business that has just begun. Entities formed or registered before the new year have this year to file. But January 1, 2024 "new businesses," approximately 5 to 6 million businesses, by FinCEN's estimates, have 90 days to complete the 51-question initial report while existing entities have until the end of 2024 to do so. Filers must also notify FinCEN of any changes to their initial report within 30 days. The Treasury Department's beneficial ownership reporting portal is now up and running. For detailed information about this new requirement, please visit ACC’s CRIB sheet, Consumer Alerts page, and FinCEN's BOI page.

Frequently Asked Questions: 

General Awareness and Reporting Process 

• FinCEN is actively raising awareness about the BOI reporting requirements through various channels and will provide continuous updates on its website. 
• Authorized individuals, including employees or third-party service providers, can file a BOI report, providing their basic contact information. 

Reporting Company Criteria and Requirements 

• The definition of a reporting company is broad but excludes certain entities based on their activities, revenue, or other specific exemptions. 
• Reporting companies are required to provide detailed information about their beneficial owners and, for those created or registered after January 1, 2024, their company applicants must be completed in the next 90 days. 

Compliance and Enforcement 

• Reporting companies are responsible for the accuracy of the information reported to FinCEN. 
• Individuals and entities can face severe penalties for violations of the BOI reporting requirements, including willful failure to report or providing false information. 
• Updated BOI reports must be filed within 30 days of any change, and all fields in the report must be completed. 

Third-Party Service Providers 

The ACC urges all affected businesses to familiarize themselves with these new requirements to ensure full compliance. For additional queries or more information, please contact ACC at answers@azcc.gov or call their customer service line at (602) 542-3026.