Navigating the Corporate Transparency Act: A Guide to CTA Compliance

As of January 1, 2024, the Corporate Transparency Act, or CTA, a Federal Law designed to combat the misuse of anonymous shell companies, mandates that all “Reporting Companies” disclose specific information to the Financial Claims Enforcement Network (FinCEN), a division of the U.S. Treasury Department.

Reporting Companies encompass both domestic and foreign corporations, including LLCs and other entities established through the filing of documents with any government authority at the state, Indian tribe, or U.S. territory level.

Key Compliance Highlights:

Reporting Deadlines: Entities created before January 1, 2024, must submit an initial report to the Department of the Treasury within one year. For those formed after this date, compliance must be achieved within 30 days post-formation. Note that for entities formed in 2024 the 30-day window has been extended to 90 days.
Mandatory Compliance: Failure to comply carries significant penalties, including civil fines and potential imprisonment. This requirement is broadly applicable, with only a few exceptions.
Identifying Beneficial Owners and Company Applicants: The CTA necessitates the identification of “Beneficial Owners,” who are individuals holding substantial control or ownership interest in the business, as well as “Company Applicants,” who are responsible for submitting formation documents.
Collecting Required Information: Businesses are obligated to gather comprehensive details about Beneficial Owners and Company Applicants, encompassing their full names, dates of birth, addresses, and unique identification numbers.
Preparing and Filing Reports: Following the collection of information, businesses must prepare and file the requisite reports with FinCEN.
Establishing Record-Keeping Practices: Implementing effective record-keeping procedures is crucial for retaining all CTA-related documentation.
Ongoing Reporting Obligations: Any alterations in Beneficial Owner information must be promptly reported to FinCEN within 30 days.

Given the CTA’s comprehensive and stringent reporting protocols, in conjunction with its broad applicability, it is imperative that all businesses subject to these regulations take action to ensure full compliance. GVM Law is prepared to help our clients navigate these new requirements. Please contact us if you’d like to have us manage your CTA compliance.