Client Advisory
Corporate Transparency Act—What you need to know

The Corporate Transparency Act (CTA), effective as of January 1, 2024, mandates that most U.S. businesses report their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). This legislation aims to combat illicit activities such as money laundering, terrorism financing, and tax evasion by increasing transparency around the individuals who own and control companies. Companies must now provide detailed information about their owners, including names, addresses, dates of birth, and identification numbers. Compliance with the CTA is crucial to avoid substantial fines and legal penalties. For more detailed guidance and assistance, please contact our office.

UPDATE (12/11/2024):

On December 3, 2024, a federal judge in the Eastern District of Texas granted a preliminary nation-wide injunction that enjoins enforcement of the CTA or the imposition of penalties for violations of the CTA pending final judgment in that lawsuit. The U.S. Department of Justice has appealed from this injunction. We expect that in connection with the appeal, a stay of the injunction will be sought. Once requested, the request for a stay should be decided quickly. In response to the injunction, FinCEN has released the following statement: “in light of the injunction, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force.  However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”  This is a developing situation. We will provide further updates when more information becomes available.