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The Corporate Transparency Act

The Corporate Transparency Act will require many companies to report information about their beneficial owners.

In 2021, Congress passed the Corporate Transparency Act on a bipartisan basis. This law creates a new beneficial ownership information reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.  Beginning on January 1, 2024, many companies in the United States will have to report information about their beneficial owners, i.e., the individuals who ultimately own or control the company. They will have to report the information to the Financial Crimes Enforcement Network (FinCEN). FinCEN is a bureau of the U.S. Department of the Treasury. The CTA will enhance the ability of FinCEN and other agencies to protect U.S. national security and the U.S. financial system from illicit use and provide essential information to national security, intelligence, and law enforcement agencies; state, local, and Tribal officials; and financial institutions to help prevent drug traffickers, fraudsters, corrupt actors such as oligarchs, and proliferators from laundering or hiding money and other assets in the United States.

What is a reporting company?

Companies required to report Beneficial Ownership Information to FinCEN are called reporting companies. There are two types of reporting companies:
  • Domestic reporting companies are corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States.
  • Foreign reporting companies are entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office.
23 types of entities are exempt from the beneficial ownership information reporting requirements. These entities include publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies.

The following list summarizes the 23 exemptions:

  1. Securities reporting issuer                        
  2. Government Authority
  3. Bank
  4. Credit Union
  5. Depository Institution Holding Company
  6. Money Services Business
  7. Broker or Dealer in Securities
  8. Securities Exchange or Clearing Agency
  9. Other Exchange Act Registered Entity
  10. Investment Company or Investment Adviser
  11. Venture Capital Fund Adviser
  12. Insurance Company
  13. State-Licensed Insurance Producer
  14. Commodity Exchange Act Registered Entity
  15. Accounting Firm
  16. Public Utility
  17. Financial Market Utility
  18. Pooled Investment Vehicle
  19. Tax-Exempt Entity
  20. Entity Assisting a Tax-Exempt Entity
  21. Large Operating Company
  22. Subsidiary of Certain Exempt Entities
  23. Inactive Entity
A reporting company will need to provide the following information about itself:
  1. Its legal name;
  2. Any trade names, “doing business as” (d/b/a), or “trading as” (t/a) names;
  3. The current street address of its principal place of business if that address is in the United States (for example, a U.S. reporting company’s headquarters), or, for reporting companies whose principal place of business is outside the United States, the current address of the primary location where the company conducts business in the United States (for example, a foreign reporting company’s U.S. headquarters);
  4. Its jurisdiction of formation or registration; and
  5. Its Taxpayer Identification Number (or, if a foreign reporting company has not been issued a TIN, a tax identification number issued by a foreign jurisdiction and the name of the jurisdiction).
A reporting company will need to provide the following information about its beneficial owners:
  1. The individual’s name;
  2. Date of birth;
  3. Residential address; and
  4. An identifying number from an acceptable identification document such as a non-expired passport or U.S. driver’s license, the name of the issuing state or jurisdiction of identification document, and an image of the identification document.
A reporting company created or registered on or after January 1, 2024, will need to provide the following information about its company applicants:
  1. The individual’s name;
  2. Date of birth;
  3. Address; and
  4. An identifying number from an acceptable identification document such as a non-expired passport or U.S. driver’s license, the name of the issuing state or jurisdiction of identification document, and an image of the identification document.
If the company applicant works in corporate formation—for example, as an attorney or corporate formation agent—then the reporting company must report the company applicant’s business address. Otherwise, the reporting company must report the company applicant’s residential address.

Handy Links:

If you would like us to file the Beneficial Owners Information Report on your behalf, please fill out our simplified form.

Beneficial Ownership Information Form