The Corporate Transparency Act (CTA)

Written By Marcia Alexander

Attention small businesses! As of January 1, 2024, the Corporate Transparency Act (CTA) has gone into effect. This new law requires qualifying companies to disclose “identifying information about the individuals who directly or indirectly own or control a company” to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). This law originated as a bill included in the William M. Thornberry National Defense Authorization Act for Fiscal Year 2021, and sponsored by NY Representative Carolyn Maloney. In an article for Wolters Kluwer, Sandra Feldman writes, “The CTA is mainly an anti-money laundering law. In it, Congress states that bad actors seek to conceal their ownership of corporations, LLCs, or similar entities in the United States to facilitate money laundering, financing of terrorism, tax fraud, and other illegal acts.”

Some businesses are exempt from filing. “These entities include publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies.” Companies that existed before January 1, 2024 must report before January 1, 2025. Companies formed after January 1, 2024 must report 90 days after receiving notice of the company’s creation or registration. Any person who provides false information, or fails to comply with requirements is liable to civil or criminal penalties, including fines or imprisonment.

Fraudulent emails are already being reported, as scammers are taking advantage of the situation. For your own safety, please only file through the authorized US government website.

 
Marcia Alexander
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