Last month, the Financial Crimes Enforcement Network
(“FinCEN”) published
proposed regulations to implement the Corporate
Transparency Act (“CTA”), which was enacted into law on
January 1, 2021. The CTA is designed to help prevent the use of
anonymous shell companies in money laundering and other illicit
activities by requiring U.S. companies to report personally
identifiable information about their owners to FinCEN. Once the
proposed regulations are finalized, the CTA is expected to have a
sweeping impact on small businesses in the U.S.
The reporting requirements of the CTA apply to domestic private
corporations and limited liability companies, as well as foreign
entities doing business in the United States. “Large
operating companies” are exempt from the CTA's
reporting requirements, which is defined to mean any company that:
(a) employs more than 20 employees on a full-time basis in the
United States; (b) filed federal income tax returns in the prior
year
