What You Need to Know About the Corporate Transparency Act

What you need to know about the CTA requirements

What is a “reporting company”?

• Domestic reporting company: a corporation, limited liability company (LLC) or other entity created by the filing of a document with a state or Indian tribe.
• Foreign reporting company: a corporation, limited liability company (LLC) or other entity formed under a law of a foreign country and registered to do business in any state by the filing of a document with a state or Indian tribe.

Exemptions from reporting

There are 23 exemptions from this reporting requirement, including entities that file reports with the Securities and Exchange Commission (SEC), governmental entities, banks, credit unions, money services, investment advisors, securities brokers and dealers, tax-exempt entities, insurance companies, state-licensed insurance producers, public utilities, inactive entities, and large operating companies.

“Large operating companies” which are exempt from the reporting requirement are entities that:

• Employ more than 20 full-time employees in the United States;
• Have an operating presence in a physical office in the United States;
• Have filed federal income tax or information returns in the United States for the previous year demonstrating more than $5 million in gross receipts or sales on Form 1120 or other form, excluding gross receipts or sales from sources outside the United State.

Reporting Requirements

Information reporting for the reporting company must include the following:

• Full legal name
• Trade or “doing business as” name(s)
• Complete current address, including principal place of business and street address
• State, tribal, or foreign jurisdiction information
• Tax identification number

Information must also be provided about beneficial owners and applicants.

“Beneficial owners” are defined as any individual who, directly or indirectly, either exercises substantial control over the reporting company or owns or controls at least 25 percent of the ownership interests of the company. “Company applicants” are those individuals that submitted the required documentation to create the entity or the documentation that allows the company to do business in the United States.

Information about beneficial owners and applicants must include:

• Full legal name
• Date of birth
• Complete current address, including business or residential address
• Unique identifying number and issuing jurisdiction (passport, driver’s license)
• Image of the document from which the identifying number was obtained

NOTE: Companies in existence before January 1, 2024 do not have to report any information regarding company applicants.

Updated reports must be filed within 30 calendar days of any change to the information reported to FinCEN. Any entity that met an exemption to report, but no longer meets that exemption is required to report within 30 days of no longer meeting the exemption.

Reporting entities must obtain a FinCEN identifier by applying directly to FinCEN at https://fincenid.fincen.gov/landing.