Meet Locally in Melbourne or Save the Trip and Meet Virtually. Serving all 67 Florida Counties.

What Is the Corporate Transparency Act?

The Corporate Transparency Act (CTA) is a significant piece of legislation in the United States aimed at combating money laundering, financial fraud, and other illicit activities. Passed in January 2021 as part of the National Defense Authorization Act, the CTA primarily focuses on enhancing transparency in business ownership to deter and detect illegal financial activities.

It is important to note that new rules implementing the Corporate Transparency Act ("CTA"), effective from January 1, 2024, have significantly expanded the scope of reporting requirements for business entities in the United States. These rules mandate that almost all business entities, including limited liability companies, corporations, limited partnerships, and their beneficial owners, file specific information with the Financial Crimes Enforcement Network (FinCEN). Notably, this law encompasses a wide range of entities, including small business entities and those created for estate planning purposes, highlighting its broad reach.

Key aspects of the Corporate Transparency Act include:

  1. Disclosure of Beneficial Ownership: The CTA requires certain U.S. companies to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. A beneficial owner is defined as any individual who, directly or indirectly, exercises substantial control over the company or owns or controls at least 25% of the company's ownership interests.

  2. Creation of a Central Registry: The information collected will be stored in a central registry maintained by FinCEN. This registry will not be publicly accessible but will be available to federal law enforcement agencies and, with certain limitations, to financial institutions conducting due diligence.

  3. Exemptions for Certain Entities: The CTA exempts several types of entities from its reporting requirements, including publicly traded companies, certain regulated entities such as banks and credit unions, and companies that employ a large number of employees and have a significant physical presence in the U.S.

  4. Penalties for Non-Compliance: The act imposes penalties for failing to report accurate information about beneficial owners or for willfully providing false information. Penalties can include fines and imprisonment.

  5. Curtail Illicit Activities: The primary goal of the CTA is to prevent and combat the use of shell companies and other opaque structures for illegal purposes, such as money laundering, financing terrorism, tax evasion, and other financial crimes.

  6. International Impact: While the CTA is a U.S. law, it has implications for international businesses and financial institutions that operate in the U.S. or do business with U.S. entities, as they may need to comply with these new reporting requirements.

  7. Implementation Timeline: The implementation of the CTA involves a rule-making process by FinCEN to establish the exact requirements, processes, and timelines for compliance.

The Corporate Transparency Act represents a major step in the global effort to increase financial transparency and combat illicit financial activities. It aligns the U.S. with other countries that have implemented similar measures.

Notification bar
This FAQ is for informational purposes only and does not constitute legal advice. We make no representations or warranties about this FAQ's completeness, accuracy, reliability, or suitability. Each legal situation is unique. Always speak with a licensed attorney for personalized guidance.

Read More FAQs...

What Is the Beneficial Ownership Information Reporting Rule?


How to Determine the Beneficial Owner of a Company?


What Is Beneficial Ownership Information Reporting?


What are the Fines and Penalties Under the Corporate Transparency Act?


Our Practice Areas

Our talented and experienced attorneys and team members come from diverse backgrounds, but we share a common belief in doing right by those that entrust us with their legal matters. At Easler Law, we bring real-world experience to the table, we will critically think for you, we will do the work right, and we will never make excuses.

A real estate attorney specializes in property law, helping clients navigate the complexities of buying, selling, and managing real estate, ensuring that transactions comply with state laws and regulations, and providing protection and peace of mind.

Responsibilities of an attorney include drafting and reviewing contracts, negotiating terms, and resolving complex issues such as zoning, leasing, property development, and disputes involving boundaries or titles. Real estate attorneys are also skilled in handling litigation related to construction defects and other property disputes, helping to resolve these matters effectively and prevent potential legal challenges.

By conducting due diligence and offering strategic legal advice, attorneys play an important role in safeguarding clients’ interests. Whether for individual homeowners or commercial property investors, real estate attorneys mitigate risks, represent clients in court, and assist them with making informed decisions that are legally sound.

Attorneys who practice business law provide legal advice for starting, managing, and expanding businesses, ensuring compliance with applicable laws. Their expertise covers various duties, including drafting and reviewing contracts, advising on corporate governance, facilitating business transactions such as mergers and acquisitions, forming partnerships, LLCs, and other business entities like DBAs, drafting and reviewing LLC Operating Agreements, and assisting with strategic planning.

Business attorneys also help wtih legal matters such as intellectual property rights, disputes, franchising, and regulatory compliance, represent clients in civil litigation to resolve issues like contract breaches and other civil matters, offer advice on administrative and compliance requirements, assist clients who are buying or selling businesses, and even help plan for succession and asset protection.

Attorneys help mitigate risks, safeguard company interests, assist clients in making legally sound, informed decisions, help manage growth, and provide guidance to navigate and resolve legal challenges effectively. Their strategic insights are invaluable in ensuring business operations align with legal standards and long-term objectives.

Probate attorneys actively manage the estate administration process following an individual's death, ensuring the distribution of assets aligns with the will or state law, and handle Formal Probate Administration for complex cases, Summary Administration for smaller estates, and Ancillary Administration for assets in other states.

Responsibilities of probate attorneys include filing petitions, appointing personal representatives to manage estate affairs, notifying interested parties to ensure transparency and prevent disputes, helping conduct an inventory and appraisal of the estate's assets, overseeing the payment of debts and expenses, handling probate litigation to resolve any disputes that arise.

They also assist in distributing the assets and formally closing the estate, ensuring all legal and financial responsibilities are met, simplifying the complex probate process, honoring the decedent's wishes, and providing clarity and support to the beneficiaries.

Will and trust attorneys help draft legal documents to ensure their clients' wishes for asset distribution are executed correctly. They draft personalized and legally compliant wills to designate beneficiaries, appoint executors, and establish trusts for asset management and distribution. It is important to note that wills and trusts are an integral part of the estate planning process.

Responsibilities of wills and trust attorneys include providing legal advice and guidance related to asset protection, minimizing tax obligations, facilitating efficient wealth transfer to designated heirs, offering advice on appointing guardians for minor children, and drafting healthcare directives for unforeseen circumstances.

By providing tailored legal advice and crafting personalized documents, attorneys help clients safeguard their legacies, protect loved ones, and ensure that all documents are both legally compliant and enforceable.

Estate planning attorneys provide advice and legal guidance for managing and distributing assets in the event of death or incapacity and assist individuals of various financial backgrounds in preparing essential legal documents such as wills, trusts, and Lady Bird Deeds, and may offer advanced techniques like offshore trusts and family-limited partnerships.

Experienced attorneys offer personalized legal advice, tailoring strategies to meet individual client needs, and assist clients in navigating complex laws and regulations affecting asset management, taxation, and inheritance.

End-of-life planning safeguards wealth and secures a lasting legacy for heirs and charitable causes. Whether estates are modest or substantial, these plans provide invaluable peace of mind and financial security for future generations.

Civil litigation attorneys manage disputes and represent their clients effectively with various legal matters and issues. They provide clear legal advice and handle all aspects of a case, from preparing documents to gathering evidence and preparing for trial. They also offer guidance and experience to help clients navigate the legal system efficiently, ensuring that cases are managed effectively and lead to timely outcomes.

Civil litigators are also skilled negotiators, often resolving disputes outside of court to save time and maintain relationships, which is particularly vital in business and probate matters.

When trials are necessary, they present and argue cases effectively to minimize losses and secure favorable outcomes. They offer continuous support and guidance throughout the litigation process, simplifying complex legal issues for their clients in both personal and business contexts.

Search Our Most Frequently Asked Questions