The Corporate Transparency Act (CTA) aims to combat financial crimes by increasing transparency in business operations. Many condominium associations fall under its requirements, making compliance essential. Understanding the CTA’s rules and taking the right steps can help associations avoid penalties.
Determine if the association must comply
The first step is determining whether the association qualifies as a “reporting company” under the CTA. Associations with 20 or more full-time employees, over $5 million in annual gross receipts, or physical operations in the U.S. may be exempt. However, smaller associations will likely need to comply, as they do not meet exemption criteria.
Collect required information
The CTA requires reporting companies to provide detailed information about beneficial owners. This includes full legal names, dates of birth, residential or business addresses, and identification numbers from government-issued documents. Associations must gather this information for each individual with significant control or ownership interest.
File the report with FinCEN
Associations must file their beneficial ownership information (BOI) with the Financial Crimes Enforcement Network (FinCEN). This filing can be done electronically through a secure portal. The initial report is due by January 1, 2025, for existing entities. Associations formed after this date have 30 days to submit their report.
Maintain accurate records
Associations should maintain accurate and up-to-date records of their beneficial ownership information. FinCEN requires updates within 30 days of any changes, such as new board members or shifts in ownership. Regularly reviewing these records ensures compliance with ongoing reporting obligations.
By taking these steps, condominium associations can comply with the CTA and avoid legal complications.