Corporate Transparency Act (CTA) Basics: What to Know, What to Do

The Corporate Transparency Act (CTA) is a new federal law to combat money laundering, terrorist financing, and fraud. The following is a quick overview with information about how we can help.

Who has to report?

Starting January 1, 2024, the CTA requires all entities formed or registered in the U.S., that are not exempt,to disclose information about the entity, its Beneficial Owners, and its Company Applicants.

• Entities formed before January 1, 2024, have until January 1, 2025 to file their initial reports.
• For calendar year 2024, entities formed after January 1, 2024, have 90 days from formation to file their initial reports.

Are my entities exempt?

There are 23 exemptions to the CTA, including for:

• Large operating companies, which are companies with more than 20 full-time employees in the U.S., over $5 million in gross annual receipts, and an operating physical office in the U.S.; and
• Tax-exempt entities.

If we’re not exempt, what do we do?

Reporting Companies must report their full legal business name, alternative names, business address, jurisdiction of formation or registration, and taxpayer identification number.

Reporting Companies must also report details for every individual Beneficial Owner and, for entities formed on or after January 1, 2024, for every individual Company Applicant, including each individual’s:

• Full legal name;
• Date of birth;
• Current residential or business street address; and
• Either (1) a unique identifying number from an acceptable identification document (e.g., a driver’s license or passport) and a copy of that document, or (2) the individual’s Financial Crimes Enforcement Network (FinCEN) identifier.

Beneficial Owners are all individuals who directly or indirectly exercise substantial control over a Reporting Company or own or control at least 25% of the Reporting Company.

Company Applicants include the individual who directly and physically files the document that creates a domestic entity or registers a foreign entity and the individual who is primarily responsible for directing or controlling such filings.

CONTACT US FOR HELP!

Subject to business intake approval, we can assist with determining: (a) which entities are Reporting Companies; (b) who is a Beneficial Owner of a Reporting Company; and (c) who are Company Applicants. We are also developing strategies to help Reporting Companies gather information needed for CTA reporting as new entities are formed.

Dina Alexander at dalexander@radlerwhite.com or 971-634-0203
Tim Parks at tparks@radlerwhite.com or 971-634-0202
Jack Conners at jconners@radlerwhite.com or 971-634-0213