The beneficial owner reporting requirements of the Corporate Transparency Act,1 by means of the “Reporting Regulations,”2 went into effect on January 1, 2024. As of that effective date the clock began to run on the requirement that almost every business in the country, whether formed before or after that date, file a report with the Financial Crimes Enforcement Network (“FinCEN”) office of the Department of the Treasury (“Treasury”) identifying itself, its “beneficial owners” and for companies formed on or after January 1, 2024, its “company applicant(s).” The scope of the CTA is breathtaking; Treasury estimates that 35 million companies will in 2024 need to file an initial report, and each year thereafter should see more than 5.5 million reports.3 Likely your firm and most of your clients are subject to these filing requirements.
A Quick Summary
Absent an exemption, every corporation4 and limited liability company (“LLC”) and as well certain other business entities organized in the U.S. (each a “domestic reporting company”) is obligated to file with FinCEN a beneficial owner report that identifies the company and each of its “beneficial owners” and, if the company was organized on or after January 1, 2024, its “company applicant(s).” Corporations, LLCs and other business organizations organized outside of the US but qualified to transact business in any state (each a “foreign reporting company”) are subject to similar reporting obligations.
