The Corporate Transparency Act: Understanding The Reporting Requirements

Recently, the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) issued a final rule regarding reporting requirements imposed by the Corporate Transparency Act (CTA). This final rule obligates certain entities to file with FinCEN reports that identify two (2) type of individuals: (i) the entity's beneficial owners, and (ii) individuals who have filed an application with a Secretary of State or similar office under the law of a state or Indian tribe to create the entity or register it to do business.

The CTA was enacted as part of the National Defense Authorization Act by Congress in January 2021 for the purpose of protecting the U.S. financial system from being used for money laundering, financing of terrorism, corruption, tax fraud and other illicit activity conducted by corporate entities. In a continued effort to combat and prevent the U.S. financial system from being taken advantage of by those engaging in illicit activity, the CTA requires