Corporate Transparency Act (CTA)

The Corporate Transparency Act (“CTA") was enacted by Congress on a bipartisan basis on January 1, 2021, as part of the National Defense Authorization Act. The CTA seeks to prevent and combat money laundering, terrorist and proliferation financing, serious tax fraud, and other financial crimes by making it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque structures. Among other reforms, the CTA requires most corporations, limited liability companies, and other similar entities formed or registered to do business in the United States to report information about their beneficial ownership to the Financial Crimes Enforcement Network (FinCEN), a bureau within the U.S. Department of Treasury.

When does the CTA take effect?

What entities are required to file reports with FinCEN?

The CTA's reporting requirements apply to corporations, limited liability companies, and other entities created by filing a document with the Department of Financial Institutions or a similar office in another state (such as a secretary of state's office).  The CTA refers to these entities as domestic reporting companies.  The CTA's reporting requirements also refer to entities formed in another country that have registered to do business in the United States by filing a document with the Department of Financial Institutions or a similar office in another state.  The CTA refers to those entities as foreign reporting companies.

Several types of types of entities are exempt from these reporting requirements, including tax-exempt entities.  The FinCEN resources below provide more information on reporting requirements and exemptions.