The Corporate Transparency Act (CTA) was adopted as part of the 2021 National Defense Authorization Act to create a federal database of company owners to protect against terrorism and prevent illegal activities such as tax fraud or money laundering.

Therefore, covered business entities are required to disclose information about the company’s beneficial owners to the US Treasury’s Financial Crimes Enforcement Network (FinCEN) within certain time frames governed by the date of the entity’s formation.  The most recent filing deadlines are:

Entity Formation Date	Entity Filing Deadline
On or Before December 31, 2023	December 31, 2024
Between January 1, 2024, and January 1, 2025	Within 90 days of formation
After January 1, 2025	Within 30 days of formation

Except for a few exemptions, all entities created by the filing of a document with the secretary of state are subject to the new mandate.  The company will be responsible for providing information including its name, principal place of business, the jurisdiction of the entity’s organization, and its taxpayer identification number.  Its beneficial owners – those individuals who ultimately own or control the company – will be required to report Personal Identifiable Information including a copy of their driver’s license or passport.

Filing is a relatively simple process through FinCEN’s CTA Website. First, companies should review the Small Business Compliance Guide.  Additional information can also be found on FinCEN’s BOI FAQ page.

Although there has been much discussion of pending litigation that might relieve companies from compliance, current court rulings make that unlikely.  Therefore, to avoid hefty financial and possibly criminal penalties, all covered entities formed on or before December 31, 2023, should get their filings done soon. 

(This blog, prepared by Campanella Law Office, is for general informational purposes only and is not intended to convey specific legal advice, nor is it intended to create or constitute an attorney-client relationship.)