Corporate Transparency Act
Corporate Transparency Act
What is the Corporate Transparency Act?
Beginning on January 1, 2024, many companies (LLCs, PLLCs, corporations, limited partnerships, etc.) in the United States will have to report information about their beneficial owners, i.e., the individuals who ultimately own or control the company. They will have to report the information to the Financial Crimes Enforcement Network (FinCEN). FinCEN is a bureau of the U.S. Department of the Treasury. This newly passed law is called the Corporate Transparency Act (CTA).
What is the purpose of the Corporate Transparency Act?
To enhance national security, intelligence, and law enforcement efforts to combat money laundering, terrorism financing, and other illicit activities.
Who will see my information?
- The CTA does not authorize public disclosure of beneficial ownership.
- FinCEN can disclose the information to other law enforcement agencies as part of a criminal or civil investigation, with court approval.
- A financial institution, with the consent of the reporting company, to facilitate the compliance of the institution with customer due diligence.
When Do I Report?
- Reports will be accepted starting on January 1, 2024.
- If your company was created or registered before January 1, 2024, you will have until January 1, 2025, to report.
- If your company was created or registered on or after January 1, 2024, and before January 1, 2025, you must report within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.
- If your company was created or registered on or after January 1, 2025, you must file your report within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
- Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 days.
What exactly are you reporting?
- The entity’s (company) name, as well as any trade names or DBAs
- Business street address
- Jurisdiction of formation
- Taxpayer Identification Number, or taxpayer number in home jurisdiction (non-US entities)
- A Reporting Company must file an updated statement if there is a change to any reported information, including a change of address or name change.
What does a Reporting Company report about Beneficial Owners?
- Full legal name
- Date of birth
- Current residential address
- A unique identification number (such as a driver’s license, identification card, or passport number)
- A digital copy of the identifying document
Who is a Beneficial Owner?
- An individual who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, either exercises substantial control over the Reporting Company or owns or controls at least 25% of the ownership interests of the Reporting Company.
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