Understanding the Corporate Transparency Act

Jan 2, 2024Business, Business Tax

The Corporate Transparency Act (CTA) is a significant federal law passed as part of the National Defense Authorization Act of 2021. It requires businesses to disclose their beneficial owners to assist in detecting money laundering, terrorism financing, and other illegal activities.

Effective from January 1, 2024, new and existing business entities (with exceptions) must comply with the CTA. The legislation defines beneficial owners as individuals with substantial control or ownership of 25% or more equity interests.

Key Aspects:

Reporting Requirements: “Reporting companies” must provide beneficial ownership information to FinCEN.

Timeline: Reporting companies must submit information within a year of January 1, 2024, with updates within 90 days of changes. Companies formed in 2024 have 90 days from the date of information to comply with these rules.

Privacy: Information submitted remains confidential to protect individual privacy.

Additional Information:

Apart from beneficial ownership, the CTA mandates disclosure of individuals involved in creating new entities after the effective date.


The CTA aims to establish federal standards for incorporation, protect national security interests, and ensure compliance with international anti-money laundering standards.

Non-Compliance Penalties:

Penalties for non-compliance include daily fines, civil fines, and criminal penalties for unauthorized disclosure or use of beneficial ownership data.


Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

Trending Posts

Subscribe to our Blog

Related Industry Posts

Subscribe to our blog


We appreciate your interest in Smith Schafer and would love to hear from you. So please complete this form or feel free to email us directly at: [email protected]