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Understanding the Corporate Transparency Act of 2021

What is the Corporate Transparency Act of 2021 (CTA) 

The Corporate Transparency Act (CTA), a federal legislation implemented on January 1, 2022, requires all entities classified as "reporting companies" to file a report with the Financial Crimes Enforcement Network (FinCEN) under the U.S. Treasury. The report must contain specific details, encompassing information such as:​

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• Beneficial owner(s) of the reporting company.

• The person, denoted as the "applicant," who is accountable for founding the company by presenting its formation documents (like articles or a certificate of organization, articles of incorporation, or a certificate of partnership) to a state agency, such as the Secretary of State.​

What is a Beneficial Owner:​

A beneficial owner is characterized as an individual who, either directly or indirectly, wields significant influence over the entity or possesses ownership or control of at least 25 percent of the entity's ownership interests. This influence may be established through contracts, arrangements, understandings, relationships, or alternative mechanisms.​

CTA Fines:

Commencing on January 1, 2024, the Corporate Transparency Act will initiate the enforcement of mandatory filings for reporting companies. Non-compliance, such as failing to submit a FinCEN report by the specified deadline, may lead to substantial fines. More precisely, FinCEN holds the authority to levy a fine of $500 per day for each day that the Corporate Transparency Act form is overdue. The CTA further incorporates provisions for criminal penalties in instances of willful violations of the law.

​It is important to highlight that almost all entities established in the U.S. are classified as reporting companies, irrespective of their formation date. Nevertheless, there exist 23 exceptions, encompassing entities that do not fall under the category of reporting companies and are therefore not required to submit a FinCEN report. To ascertain whether an entity qualifies for exemption, please consult the list of Corporate Transparency Act exemptions.

​If your company is not exempt from the CTA, it means:​

• It qualifies as a reporting company and must file a FinCEN report.

• You can opt to engage the services of FinCEN Reporting, Inc.to compile the requisite information pertaining to your company, its beneficial owner(s), and the individual accountable for its establishment. Subsequently, we will meticulously prepare and submit the report to FinCEN on your behalf.

Explore the possibility of engaging our services to simplify the procedure of gathering and submitting the necessary information for your Reporting Company's initial or amended FinCEN reports. Take a closer look at our range of services and review our fees for more detailed information.​