The Corporate Transparency Act

New reporting obligations for many small businesses.

The Corporate Transparency Act (the CTA) is now in effect and imposes important new reporting obligations on many small businesses relating to beneficial ownership (which is a broad concept that may extend well beyond direct and indirect owners). Failure to comply can lead to fines of up to $500 per day and up to 2 years in prison. Company officers can have personal liability for compliance failures. Compliance can range from simple to complex. Below is a summary of critical information about the CTA.

Contents

What Should Business Owners and Executives Know About the CTA? The Corporate Transparency Act (the CTA) is now in effect and imposes important new reporting obligations on many small businesses. Read more.

Understand the basics, delegate responsiblity, and adopt a plan. Read more.

Your company is required to report under the CTA if it is a “Reporting Company,” unless it qualifies for an exemption. Read more.

All Reporting Companies must make an initial filing with FinCEN disclosing the necessary Beneficial Ownership information. Read more.

In spite of the name “Beneficial Owner,” the term is far broader than simply including direct and indirect owners, and may include directors, officers, employees, creditors, and others, and individuals. Read more.

In spite of the name “Beneficial Owner,” the term is far broader than simply including direct and indirect owners, and may include directors, officers, employees, creditors, and others, and individuals. Read more.

A FinCEN ID is an identification number that an individual or company can obtain that can limit the number of times they may need to provide the required information in connection with CTA filings. Read more about why you’d need one.

Think you’re exempt? The penalties for getting it wrong can be severe. Read more.

There are quite a few transactions and events that could lead to CTA reporting requirements. Read more.

Consider tasking whomever will lead your CTA compliance efforts do a comprehensive review of relevant agreements and policies to identify where changes may need to be made. Read more.

It has long been a common practice to backdate agreements for clean dates or other reasons. Read more how CTA impacts this commonplace technique.

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