| Federal legislation, the Corporate Transparency Act (“CTA”), was enacted by Congress on January 1, 2021, as part of the National Defense Authorization Act. The CTA includes significant reforms to anti-money laundering laws and is intended to help prevent and combat money laundering, terrorist financing, corruption, and tax fraud. The CTA establishes a beneficial ownership reporting requirement for corporations, limited liability companies, and other similar entities formed or registered to do business in the United States. Beneficial ownership reports must be filed with the FInancial Crimes Enforcement Network (FinCEN), a bureau within the U.S. Department of Treasury.
- When does the CTA take effect? The reporting requirements under the CTA come into affect on January 1, 2024. Business entities formed prior to such dated will have until January 1, 2025, to comply with the CTA’s reporting requirements.
- Who is required to report beneficial ownership information (“BOI”)? Corporations, limited liability companies, and other entities that are formed by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe.
- Is anyone exempt from the required reporting? There are 23 categories of entities that are exempt. View the list
- is this an annual reporting requirement. No, the law only requires an initial report. Updated reports and corrected reports as needed.
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