Family offices may need to update some of their practices to comply with the Corporate Transparency Act, which took effect on January 1.
“Family offices are used to operating in lightly regulated environments, and now they will potentially have to disclose their beneficial owners,” says Nathan D. Imfeld, senior counsel at Foley & Lardner LLP in Milwaukee.
Whether a family office gets an exemption will depend on its structure.
“It’s almost exclusively an issue for stand-alone family offices where there is no operating business anymore — perhaps the family had a legacy operating business and sold it, and now the family office is the vehicle for managing the family’s wealth,” Imfeld says. “A family office with a lot of different LLCs in the U.S., or especially those using foreign jurisdictions or sophisticated investment vehicles, may be affected.”
A number of law firms and publications have published detailed information on the CTA:
- Foley & Lardner: Ten Minute Interview: Corporate Transparency Act
- Morgan Lewis: Corporate Transparency Act: What Family Offices and LLCs Need to Know
- ArentFox Schiff: The Corporate Transparency Act: What Family Offices Need to Know
- Forbes: The Impact Of The Corporate Transparency And Enablers Acts On U.S. Family Offices And Beyond: Key Compliance Shifts To Watch