Legal Alert: Is My Business Required to Report under the Corporate Transparency Act?

The Corporate Transparency Act (“CTA”) is a federal law, effective January 1, 2024, to combat money laundering and use of anonymous shell corporations. The United States Department of Treasury has created a database to be used by law enforcement and regulators to trace small and medium sized businesses. Covered businesses will need to file a report electronically with this federal database.

The new law applies to all businesses, including corporations, limited liability companies (LLCs), and other types of companies that are created by a filing with a Secretary of State or equivalent official. There are 23 exceptions. Most of the exceptions include nonprofits, public companies, banks and other regulated entities. However, there is also an exception for large companies. Large companies are defined as those that have more than 20 employees and have more than $5 million in gross receipts or sales on their most recently filed federal income tax return. 

Additional guidance on implementation, including the required forms and filing information, is expected in the coming weeks. We intend to follow this post up with additional compliance information as it becomes available. In the meantime, if you have any questions about the CTA, please feel free to reach out to us.