By Peter Wang and Jennifer Leung
This alert updates our initial alert on the CTA published on March 1, 2021, to reflect the final rule published by the Financial Crimes Enforcement Network (FinCEN) bureau of the U.S. Department of the Treasury on September 30, 2022.
On January 1, 2021, Congress passed the Corporate Transparency Act (CTA) as part of the 2021 National Defense Authorization Act. The CTA requires most private companies formed in the U.S. or registered to do business in the U.S. to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) bureau of the U.S. Department of the Treasury. Although the CTA is intended to eliminate the anonymity of individuals that use shell companies for illegal activities, the reporting requirements will affect legitimate private companies. Companies should be aware of and prepare for the new reporting requirements to avoid civil and criminal penalties for failure to file the information when required.
FinCEN was tasked with adopting regulations detailing how the CTA would be implemented. On September 30, 2022 FinCEN published its final rule implementing the CTA’s requirements for reporting.
