Corporate Transparency Act’s New Reporting Requirements 

Corporate Transparency Act’s New Reporting Requirements 

On Jan. 1, the Corporate Transparency Act (CTA) was enacted. This requires certain companies in the U.S. to disclose information regarding who owns or controls a company. Companies must report this to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

Which Companies Need to Report to FinCEN?

For U.S.-based companies, corporations, LLPs, or similar business entities formed by filing a document with an office under the law of a state must follow the CTA.

Certain foreign countries also need to abide by CTA if they are registered to do business in the U.S. and are privately formed entities or businesses formed under the law of a foreign country and are registered to do business in the U.S.

Some businesses that do not need to follow CTA are SEC-reporting companies, banks, credit unions, insurance companies, and accounting firms.

Businesses are also exempt if they meet the following requirements:
· Employ more than 20 full-time employees in the U.S.
· Filed a federal tax return the previous year showing more than $5 million in gross sales or receipts.
· Has a physical office in the U.S.

Who Is Considered a Beneficial Owner?

The controlling owner—or a beneficial owner—is considered someone who has substantial control over the business or who owns (or controls) at least 25 percent of the company’s interests.

The CTA does not limit how many beneficial owners can be reported. Still, certain owners do not need to be listed, including a minor child (if their parent or guardian is reported), someone acting on behalf of another person, an employee of the company whose control over the company is only through their employment status, an inheritor whose only interest is a future inheritance, and a creditor of the reporting company (unless they own at least 20 percent of the equity interests and have substantial control over the business).

What Do Companies Need to Report Under the Corporate Transparency Act?

When submitting information per the CTA, companies need to provide specific details about the business. This can include:
· Their full legal name
· Their trade names or other names they do business as
· Their address
· Their jurisdiction of formation or registration
· Their federal taxpayer ID number

Companies also need to submit critical information about beneficial owners.

This information can include:

· Their full legal name
· Their birthdate
· Their home address
· Their driver’s license, passport, or other identification numbers
· Image of their documents with their identification numbers

When Must Companies Report the CTA Information?

To comply with the CTA, all companies that were formed before Jan. 1, 2024, must file their reports by Jan. 1, 2025. New companies that were formed after the first of the year have 90 days after creating their company to file their reports.

After the initial filing, companies need to submit updates within 30 days to provide updated information or to correct any errors.

Failure to comply with the CTA reporting requirements can result in penalties for companies. They can face fines and criminal penalties.

Why Hire Us 
When determining if you need to adhere to the Corporate Transparency Act requirements or how to comply with them, hire our business attorneys at Johnstone Adams LLC to help you.

Ranked in the 2023 U.S. News – Best Lawyers® “Best Law Firms” list regionally in 12 practice areas, we have experts in many areas of law to give our clients top-notch representation. In business for more than a century, our firm can mix its experience with the ability to evolve with the changing times.

To get started, contact us at 251-319-4659 or


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