Corporate Transparency Act

The Financial Crimes Enforcement Network (FinCEN) released a final rule implementing the Corporate Transparency Act (CTA), which requires extensive reporting requirements for non-exempt companies regarding their beneficial owners and company applicants. These regulations are intended to aid in combatting money laundering, terrorist financing, corruption, and other illicit activities but require attention and compliance by every entity formed within the United States as well as all foreign entities which are qualified to do business in the United States.  The rule became effective on January 1, 2024, and FinCEN has developed a nonpublic database to store the reported information.

The reporting requirements include providing information such as legal names, addresses, tax identification numbers, and identifying documents for beneficial owners and company applicants. Failure to fully and timely comply with the reporting requirements can result in civil and criminal penalties.

Troutman Pepper Locke is closely tracking developments regarding the CTA and similar statutes proposed to be implemented by individual states. Companies should review the exemptions and, if not exempt, determine their reporting obligations, establish internal compliance processes, and stay updated on any additional guidance provided by FinCEN. Our attorneys are available to help determine the impact of the CTA on your business and transactions, as well as advise with respect to actions reporting companies can take to comply with the CTA.