Corporate Transparency Act Applied To M&A

The Corporate Transparency Act (CTA), designed to combat the use of shell companies for illicit purposes and increase ownership transparency in corporate structures, takes effect on January 1, 2024. As discussed in more detail in The Corporate Transparency Act: What To Know and Expect Starting January 1, 2024, the CTA will require an estimated 30 million entities not specifically exempted under the CTA—known as Reporting Companies¹ —to identify and report to the U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN) detailed information on themselves, their Company Applicants, and the owners, officers, and control persons that constitute their Beneficial Owners. Prospective buyers and target companies should carefully consider how these new CTA regulations may apply to the complicated corporate structures commonly used in mergers and acquisition (M&A) transactions. In addition, in the M&A context, these regulations will mandate new processes for