The Corporate Transparency Act (“CTA”) was enacted on January 1, 2021, as part of efforts by the United States Congress to combat financial crime by increasing transparency around the beneficial ownership of legal entities. The CTA will require many millions of entities, from unsophisticated small businesses to complex holding company structures, to file confidential reports with the Financial Crimes Enforcement Network (“FinCEN”), starting in 2024, on the entities and on individuals who have significant direct or indirect ownership, are senior officers, or otherwise are deemed to have a measure of control over an entity. This article provides a general introduction to the CTA’s reporting requirements, including the statute’s history and purposes, and the implementing rule adopted by FinCEN. It gives practical advice for legal practitioners who may be unfamiliar with the CTA, with special attention to issues faced in determining which legal entities are reporting companies under the CTA and which individuals must be reported as beneficial owners.
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