Preparing For The Corporate Transparency Act

Beginning in January 2024, many small businesses and family investment companies will be required to report ownership and management information to the U.S. Department of the Treasury. The reporting requirements arise under the Corporate Transparency Act, which is included in the Anti-Money Laundering Act of 2020, and are intended to help prevent and combat money laundering, terrorist financing, corruption, tax fraud, and other illicit activity.

When the Corporate Transparency Act takes effect, beneficial ownership information (BOI) reports must be filed electronically with the Treasury Department's Financial Crimes Enforcement Network (FinCEN). The BOI reports will identify a company's beneficial owners. A "beneficial owner" is an individual who either directly or indirectly: (1) exercises "substantial control" over the company, or (2) owns or controls at least 25% of the company's ownership interests. An individual can exercise "substantial control" over a