Corporate Transparency Act – New Requirements to Disclose Ownership Information to the Federal Government

Bruce W. Akerly - Founding Member
Feb 24 2021

On January 1, 2021, the Corporate Transparency Act (CTA) became law. Some important facts about the CTA include:

 

  • The law will become effective when new regulations are promulgated by the Secretary of the Treasury (not later than January 1, 2022).
  • The required report involving beneficial ownership must be filed by any domestic/state corporation, limited liability, or similar entity. A form should be created soon for submission to your state's Secretary of State. Some entities are exempt, which are quite complex. For example, if ALL of the following are present, there is no need to comply: 20+ full-time employees, sales over $5MM, and an operating presence in the United States. Also, public companies, governmental entities, certain regulated companies, and nonprofit companies are exempt.
  • The information that must be disclosed included the full legal name of any applicant or beneficial owner, their date of birth, their residential or business address, and a unique identifying number from a driver's license, US Passport, or similar identifying document.
  • CTAs are not public records. The failure to comply can/will result in substantial monetary penalties and up to two years in jail.