Corporate Transparency Act (CTA): A Reference Guide
By now, you’ve seen dozens of blog posts and articles about the Corporate Transparency Act. It’s a new federal law that went into effect on January 1, 2024 that will affect most businesses in the United States. Rather than generate yet another article, we thought our clients would appreciate a simple reference guide to this new and very impactful law.
What: The Corporate Transparency Act (CTA) was enacted into federal law as part of the National Defense Act for fiscal year 2021 and is also referred to as the Beneficial Ownership Information Act and requires the disclosure of the beneficial ownership information (BOI) for certain entities from people who own or control a company. The information given will only be accessible by approved government entities. The information will not be accessible by the public. Companies will report their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), a bureau within the U.S. Department of the Treasury.
Why: The new law was enacted by Congress to combat illegal activities such as tax fraud, money laundering, the financing of terrorism or other illicit activities. CTA is designed to make it harder for criminal actors to use shell companies to hide their illegal gains and to help law enforcement identify who is involved in certain companies.
When: New companies created in 2024 have 90 days from creation to file electronically, and companies in existence before 1/1/2024 have until 12/31/24 to file.
How: All filing is electronic/online, there are no paper forms.
Who: Companies created by the filing of a document with any U.S. Secretary of State.
- Partnerships
- Limited Liability Companies (LLC’s)
- C Corporations
- S Corps (subchapter S)
- Not Sole Proprietorships
Exceptions: There are a number of categories of exemptions including public accounting firms, banks and credit unions, publicly traded companies, tax-exempt entities, securities brokers/dealers and certain inactive entities.
About the author:
Patrick J. Ertle
Attorney
I’ve been an Ohio attorney for over 30 years, primarily working in business transactions, the nonprofit sector, and estate and succession planning. When it comes to succession planning, I especially enjoy helping businesses create a solid plan that allows for a smooth transition with a strategic outcome.
My wife Susan and I live in Lakewood. We enjoy spending time with our four children and four grandchildren, and we share a love of travel.
