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CORPORATE TRANSPARENCY ACT OF 2021

In 2021, Congress passed the Corporate Transparency Act which is intended to track illegal activity of individuals utilizing shell companies to transact illicit activity. This newly adopted legislation has a broad effect on small companies, including Community Associations, which are registered as companies in the State of Maryland.

Homeowner Associations and Condominiums in Maryland that are registered with the State Department of Assessments and Taxation must comply with the Act by providing information such as the contact information of the Board of Directors. Boards may submit the information through the Government's Beneficial Ownership Information website: www.fincen.gov. The law also generally applies to all companies unless specifically exempted.

 

Directors must provide a copy of their government issued ID or another form of identification. The deadline for compliance is December 31, 2024 for Associations formed prior to January 1, 2024. Associations formed on or after January 1, 2024, but before January 1, 2025 must file their initial report with Fin CEN within 90 days of receiving the notice of its formation. Associations formed after January 1, 2025 will have thirty days to report with Fin CEN.

 

A recent ruling striking down the law in the 11th Circuit only affects those plaintiffs, members of the NSBA, and the States of Florida, Alabama, and Georgia. Persons who willfully violate the law can be subject to monetary penalties up to $500 per day and up to 2 years of imprisonment and a fine of up to $10,000.

For more information regarding the law and its affect on your community, please contact the Law Office today.

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