Corporate Transparency Act

Congress enacted The Corporate Transparency Act (CTA) into law on January 1, 2021. Please read this page to learn more about it because non-compliance is serious business. Discover why contacting Miller Law Group now is necessary to ensure that addressing a relatively minor reporting process can avoid serious problems down the road.

What Is the Corporate Transparency Act?

The Corporate Transparency Act (CTA) is a U.S. law enacted to increase transparency in corporate ownership to:

• • combat money laundering;

• terrorism financing; and
• lastly, other illicit activities

The CTA aims to prevent the misuse of shell companies for illegal purposes by ensuring that law enforcement and other authorities have access to accurate ownership information.

Corporate Transparency Act Reporting Requirements

The CTA requires certain corporations, limited liability companies, and similar entities to report information about their Beneficial Owners to the Financial Crimes Enforcement Network (FinCEN).

Beneficial Owners own or control at least 25% of the entity or exercise substantial control over it.

• Reporting Companies: The CTA applies to corporations, limited liability companies, and other similar entities created by filing a document with a secretary of state or similar office under the law of a state or Indian tribe.
• Beneficial Ownership Information (BOI): Reporting companies must disclose information about their beneficial owners. A beneficial owner is an individual who, directly or indirectly, exercises substantial control over the entity or owns or controls at least 25% of the ownership interests.
• Information Required: The report must include the
  • full legal name;
  • date of birth;
  • current residential or business street address; and
  • lastly, a unique identifying number from an acceptable identification document (such as a passport or driver’s license) for each beneficial owner is required.
• Filing Deadlines:
  • Existing entities must file their initial BOI report within a specified period after the regulations become effective.
  • New entities formed after the effective date must file their BOI report within 30 days of formation.
• Exemptions: Certain entities are exempt from reporting, including
  • publicly traded companies;
  • banks;
  • credit unions; and
  • other entities already subject to federal or state regulation.
• Penalties: Non-compliance with the CTA can result in civil and criminal penalties, including fines and imprisonment.
  • Fines: Non-compliance can lead to penalties ranging from $500 to $10,000 per violation. In some cases, criminal penalties can be as high as $250,000.
  • Imprisonment: Violations can also result in imprisonment for up to two years. In more severe cases, imprisonment can extend up to five years.
• Privacy Protections: The information reported is not publicly accessible and is intended for use by law enforcement and other authorized government authorities.

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