In our last edition of E Compliance Insights we discussed the Corporate Transparency Act (“CTA”), which was passed at the tail end of the last US Congressional session as part of the National Defense Authorization Act. The CTA is intended as an anti-money laundering enforcement tool. The CTA, once regulations are created, will impose a new reporting requirement on small businesses that are created or registered in the USA. The CTA will impact privately held corporations, LLCs, trusts, holding companies and perhaps more. Those companies will be required to disclose the identity of beneficial owners (25% or more) and those who control the entity. You can find our article here.

Reports will be made to the US Treasury’s Financial Crimes and Enforcement Center (“FinCEN”). Fines for non-compliance are expected to be stiff and will likely include civil fines of up to $500 per day as well as criminal fines and even prison sentences. Companies registered or created in the US should be aware of this law and be prepared to comply when regulations are finalized later this year. This is also an activity that should be added to private companies compliance programs. Public companies are generally exempt as are certain banks, brokers and dealers, 501 (c ) non-profits along with other exceptions.

An excellent summary of the CTA, created by lawyers at Foley Hoag, can be found here. 

If you desire additional information, please feel free to reach out to us at [email protected] .