The Corporate Transparency Act (the CTA, Title LXIV of the National Defense Authorization Act for Fiscal Year 2021) was enacted in 2021 in an effort to prevent the use of U.S. business entities for illicit purposes. The CTA notably introduced the requirement that reporting companies disclose their beneficial owner information (BOI), part of a growing international trend toward corporate transparency and accountability. According to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), the CTA will officially come into effect on Jan. 1, 2024, requiring reporting companies, such as corporations and limited liability companies, to submit reports including the identities of their beneficial owners.

Where We Are

With three short months left before the CTA is set to go into effect, existing reporting companies should begin making plans on assembling their reports and possibly seeking guidance from their legal advisers. For companies formed prior to 2024, reporting is currently due one year from the effective date, or by Jan. 1, 2025. However, FinCEN recently proposed a regulation to extend the deadline for companies created after Jan. 1, 2024, and before Jan. 1, 2025. This extension would give those new corporations 90 days (originally 30 days) to submit their initial BOI reports. This proposed extension is meant to give these newly formed corporations time to understand the filing obligations and compile the documents necessary to meet the filing requirements. Please note, however, that companies formed on or after Jan. 1, 2025 will need to adhere to the original 30-day time frame.