Corporate Transparency Act (CTA)

Corporate Transparency Act (CTA)

A New Federal Law that went into place January 1, 2024 called the Corporate Transparency Act (CTA). The CTA establishes a beneficial ownership reporting requirement for corporations, limited liability companies, and other similar entities formed or registered to do business in the United States. Most new and existing businesses are required to file a Beneficial Ownership Information report with the Financial Crimes Enforcement Network (FinCEN) a bureau of the US Department of Treasury. The CTA allows FinCEN to collect that information and provide it to authorized government authorities and financial institutions.

The beneficial ownership reports must be filed with the US Treasury’s Financial Crimes Enforcement Network (FinCEN). Businesses formed before January 1, 2024 have up to one year to complete the filing. Businesses formed after January 1, 2024 must file within 90 days of creation or registration.

Who Has To Report?

Most active corporations, LLCs, and other businesses formed by filing a document with a Secretary of State’s office in the United States. Contact FinCEN to confirm whether your business is required to report.

Who Does Not Have To Report?

Publicly traded companies, banks and other financial institutions, tax-exempt nonprofits, public utilities, and some large businesses. These are already subject to other regulatory requirements. (See the Small Business Compliance Guide, Chapter 1.2 for the list of exempted entities.)

How Do I Report, And Whose Information?

Reporting companies will report beneficial ownership through FinCEN’s website. There is no fee for submitting this report.

A Beneficial Owner is any individual who either exercises substantial control over a company or owns or controls at least 25% of the ownership interest. If a business entity owns or controls at least 25% of a reporting company, then its Beneficial Owner(s) must also be reported.

Company Applicants are individuals who, after 1/1/2024, directly submitted the formation or registration document for a company or were primarily responsible for that submission. There may be up to two Company Applicants.

What Is Reported?

Company legal name and current principal place of business street address in the U.S.

Any assumed business name (DBA) used by the company.

Taxpayer identification number (TIN or EIN)

Each Beneficial Owner’s name; birth date; residential street address; and an identifying number with an image of an acceptable ID (e.g., driver’s license or passport).

Each Company Applicant’s name; birth date; residential street address, (applicants whose business is submitting registration documents may use their business address); and an identifying number with an image of an acceptable ID (e.g., driver’s license or passport).

See Intake Form Questions for the BOI/CTA Report

When Do I Report?

Existing Companies Have One Year to File; New Companies Must File Within 90 Days of Creation or Registration

If your company was created or registered prior to 1/1/2024, you have until 1/1/2025 to report.

Companies created on or after 1/1/2024 must report within 90 days.

Failure to report is punishable with a civil penalty of up to $500/day.