Last year we reported on the then new Corporate Transparency Act which was enacted on January 1, 2021. It became effective on January 1, 2024 and requires corporations, Limited Liability companies, foreign entities and LLCs to disclose their beneficial ownership information including personal identifying information for their human beneficiary owners. The filing deadline is December 31, 2024.

There were challenges to the constitutionality of the Act and it appeared that enforcement may be stayed. But this has not happened. The Act is still in effect and has even been updated by increased financial penalties for non-compliance—fines of up to $591.00 per day. Criminal penalties can also apply. Business owners could be sentenced to imprisonment for up to two years. Not only must a Beneficial Ownership Information Report be filed, but the report must be updated and corrected to keep information correct. One requirement has been relaxed. No longer will a company need to obtain an EIN to file its report. An EIN is no longer required where the company does not already have one.

Filing Requirements

A company formed during 2024 must file a Beneficial Ownership Information Report within 90 days of its formation and this report must also contain information about the attorney handling the business entity formation as well as information about the paralegal or secretary actually filing the documents with the Corporation Commission.

Companies dissolved before January 1, 2024 are exempt from filing but only if they are irrevocably dissolved. An administrative dissolution may not be sufficient since Arizona allows up to six years to reinstate a corporation.

Due to the size of the potential penalties, we recommend that filing be your default decision. And filing must be done soon—no later than December 31, 2024.

If you have questions about business law, you may schedule a complimentary conference with one of our experienced lawyers by filling out the form below or contacting any of our staff at 602-277-4441.