Getting Ready For The Corporate Transparency Act

This article seeks to provide a primer of the reporting requirements and penalties of the Corporate Transparency Act which is set to take effect on January 1, 2024.

Background

The Corporate Transparency Act (“CTA”) was enacted on January 1, 2021, as part of the National Defense Authorization Act for the Fiscal Year 2021, with the goal of protecting and safeguarding U.S. national security interests against money laundering, the financing of terrorism, and other illegal activities. Because “shell” companies are often used to facilitate illegal activities, the CTA requires non-exempt companies to disclose certain company information, including information about the company's beneficial owners, to the Department of Treasury's Financial Crimes Enforcement Network (“FinCEN”).