Federal Law

Overview of the Corporate Transparency Act

The Corporate Transparency Act, effective January 1, 2024, mandates U.S. businesses to report significant ownership and control information to the Financial Crimes Enforcement Network (FinCEN). This act primarily targets ‘reporting companies’ like corporations, LLCs, and similar entities, both domestic and foreign, operating in the U.S. Exemptions include sole proprietorships (unless formally registered) and 23 other entity types such as publicly traded companies.

Key Reporting Requirements:

Legal and trade names, physical address, jurisdiction, and Tax Identification Number of the company.
Personal details of each beneficial owner (those with substantial control or at least 25% ownership).
Compliance Deadlines:

Existing companies must report by January 1, 2025.
New companies formed from January 1, 2024, to January 1, 2025, have 90 days to comply.
Companies established on or after January 1, 2025, need to report within 30 days of formation.
Consequences and Access:
Non-compliance can result in significant penalties. The reports are accessible to various government officials and under certain conditions to financial institutions.