Beginning January 1, 2024, the US Corporate Transparency Act (CTA) will require corporations, limited liability companies, limited partnerships and other similar entities to disclose beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), a bureau within the US Department of the Treasury. The CTA aims to enhance financial transparency and strengthen anti-money laundering efforts, but it also has far-reaching consequences around privacy and compliance obligations.
Explore our collection of insights and resources to stay up to date on the CTA.
Insights
Understanding the Corporate Transparency Act’s Company Reporting Obligations (10/16/23): Starting January 1, 2024, the CTA will mandate all new companies formed or qualified to do business in the United States (and by January 1, 2025, all companies formed or qualified to do business in the US prior to January 1, 2024) to report beneficial ownership information (BOI) to FinCEN. The CTA will require companies to report BOI unless they fit within defined exemptions. This article outlines which companies are impacted, what information they must report, the penalties for failing to report and other guidance related to the CTA.
Unpacking CTA Disclosure Complexity with Private Trust Companies (9/8/23): Most family-owned entities will need to comply with beneficial ownership information reporting requirements under the CTA. In this Bloomberg Tax article, McDermott lawyers Harry Dao and Elise McGee examine whether a private trust company (PTC) can help lessen the disclosure burden under the CTA, analyzing whether a PTC can qualify for a CTA exemption and whether an entity owned by one or more trusts of which the PTC serves as a fiduciary can qualify for a CTA exemption.
FinCEN Seeks Guidance on Applying CTA Reporting Obligations to Trusts and Estates (1/10/22): The CTA is expected to impose reporting obligations on certain types of trusts and various individuals related to trusts; however, it does not explicitly address many types of trusts commonly used in US estate planning. In response, FinCEN released proposed regulations governing the CTA and has requested comment on how to apply the proposed regulations to certain kinds of trusts. This article provides a glimpse into how the CTA may apply to trusts and details timing and penalties for reporting to FinCEN.
FinCEN Announces Anti-Money Laundering Priorities (7/16/21): FinCEN issued its government-wide anti-money laundering (AML) and countering the financing of terrorism (CFT) priorities in June 2021. The AML/CFT priorities demonstrate that the Biden administration considers enhanced AML requirements, regulations and enforcement to be key components of its criminal and civil enforcement efforts, and important tools to address many of the broader issues confronting the US and the international community. This article explores how these priorities may impact companies and details the steps companies should take now to prepare for enhanced AML regulations and enforcement activity.
President Biden Elevates Anticorruption Enforcement (6/7/21): President Biden’s memorandum on Establishing the Fight Against Corruption as a Core United States National Security Interest ushers in a new era of collaboration between federal agencies and establishes a whole-of-government approach to fighting global corruption in furtherance of the national security interests of the US. This article outlines the steps companies should take to position themselves in this new era of compliance.
The Corporate Transparency Act: New Beneficial Ownership Reporting Requirements (2/12/21): On January 1, 2021, the US Congress passed the National Defense Authorization Act (NDAA). Found within the NDAA is the CTA, which will require corporations, limited liability companies and other similar entities to disclose BOI to FinCEN. Companies should carefully review the CTA to determine whether they are “reporting companies” and evaluate their potential obligations under the forthcoming regulations.
Congress Passes the Corporate Transparency Act—Overriding Presidential Veto (12/15/20): On December 11, 2020, and by a veto-proof majority, the US Senate joined the US House of Representative in passing the NDAA for Fiscal Year 2021, which includes the CTA. The CTA requires a report to be filed with FinCEN that identifies each beneficial owner of an applicant forming a reporting company. While questions remain as to the full implications of the Act, it represents an important step in the right direction for the United States in the battle against money laundering and terrorist financing.
RESOURCES
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