CTA & BOI Frequently Asked Questions

Corporate Transparency Act

Frequently Ask Questions

Get Informed and Prepare for CTA Compliance

What is the Corporate Transparency Act (CTA)?

The Corporate Transparency Act, or CTA, is a U.S. federal law that was passed in 2020. Its primary aim is to combat money laundering and the use of anonymous shell companies by requiring certain companies to report their beneficial ownership information to the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN). The CTA is significant in the fight against financial crimes as it helps law enforcement agencies and regulators to better trace and identify the individuals behind potentially illicit activities involving anonymous shell companies. It aids in making it more difficult for criminals to hide their assets and financial dealings.

The CTA was enacted into law as part of the National Defense Authorization Act and will go into effect on January 1, 2024.

FinCEN REPORT’s software was developed to help reporting companies submit their beneficial ownership information (while safeguarding data privacy) and stay compliant.

Which companies are affected by the Corporate Transparency Act?

The CTA applies to any corporation, LLC, limited partnership or other entity formed in the U.S. by the filing of a document with a secretary of state (or similar tribal government). The CTA also applies to any similar entity formed outside the U.S. that registers to do business in the U.S. by filing a document with a secretary of state (or similar tribal government).

Business owners and officers should consult with an attorney to determine how the CTA applies in any particular case.

If your company will need to file a report under the CTA, FinCEN Report can streamline the filing process and help to keep your confidential information safe and secure.

What information must companies report under the CTA?

Covered companies are required to report information about their beneficial owners, which includes individuals who own or control at least 25% of the company or exercise substantial control over its operations. The reported information includes names, dates of birth, addresses, and identification numbers.

Visit our home page to learn more about the required documents.

Are there any exemptions from reporting under the CTA?

Certain categories of companies, such as publicly traded companies, non-profit organizations, and entities with a substantial number of employees, are exempt from reporting under the CTA. Exemptions can vary depending on the specific provisions of the law. Please talk to your attorney to determine if you need to file.

What are the penalties for non-compliance with the CTA?

Companies that fail to comply with the reporting requirements of the CTA may face civil and criminal penalties, including fines and imprisonment. Individuals who willfully provide false or misleading information may also be subject to penalties.

FinCEN Report is here to make the filing process easy so you don’t have to risk penalties associated with non-compliance.

How does the Corporate Transparency Act impact privacy and data security?

While the CTA is aimed at increasing transparency in business ownership, it may raise concerns about the privacy and security of personal information. The law includes provisions to safeguard reported information and limit its disclosure to authorized entities.

To further increase security, Our FinCEN Report filing service is certified by Breachlock to ensure your privacy throughout the process.

How can companies ensure compliance with the Corporate Transparency Act?

You’ll be able to either file directly via the U.S. Treasury Department website or file directly with FinCEN Report. Once FinCEN Report receives all the Beneficial Ownership information required by the new CTA, it is securely sent over to the U.S. Treasury Department. Companies will then receive a confirmation letter from FinCEN confirming the filing.

FinCEN Report has gone a step further and is also providing a dashboard that Business Owners can access at any time to change Beneficial Ownership information as needed.

What are the reporting deadlines for companies under the Corporate Transparency Act?

New companies formed on or after January 1, 2024 (but before January 1, 2025) must file an initial report within 90 days of formation. Companies existing before January 1, 2024 that are not exempt must report their beneficial ownership information within one year of the effective date of the regulations (January 1, 2024).

If you own more than one company, or manage the compliance of many organizations, our system will be able to help you file for individual and/or multiple companies in the needed timeline easily and comprehensively.

Does the Corporate Transparency Act apply to foreign-owned companies operating in the United States?

Yes, the CTA applies to foreign-owned companies that conduct business within the United States and meet the reporting criteria. It is part of the U.S. government's efforts to ensure transparency and prevent the misuse of anonymous entities for illicit purposes.

For foreign-owned companies operating in the United States, FinCEN Report ensures that you adhere to CTA regulations.