What Is the Corporate Transparency Act?

The CTA requires most business owners to report who owns or controls their business. The CTA is intended to help identify and prevent money laundering, tax fraud, and similar financial crimes. The Financial Crimes Enforcement Network (FinCEN), part of the US Treasury Department, oversees the CTA’s implementation. Under the act, “reporting companies” must report “beneficial ownership information” to the government. Businesses registering after the CTA’s January 1, 2024, effective date must also provide information about “company applicants.” We break down these terms in turn.

What Is a Reporting Company?

The definition of a reporting company is broad, including both foreign and domestic entities. A foreign entity is formed under the laws of a foreign country, while a domestic entity is formed under the laws of a state or tribal government. A domestic company is a reporting company if you had to file documents with a state or tribal government to create it. A foreign company is a reporting company if you have registered it with a US state or tribal government. The entity’s business structure generally determines whether it is a reporting company.

Massingill Staff, Author at Massingill

Feb 6, 2024 | By Massingill Staff | Read Time: 4 minutes | Business Law

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What Does the Corporate Transparency Act Mean for Small Business Owners in Texas?

In 2021, the federal government passed the Corporate Transparency Act (CTA), scheduled to take effect on January 1, 2024. The CTA requires many small businesses to file Beneficial Ownership Information (BOI). Although filing BOI does not involve extensive information, determining who and what to file is complicated. If you are a small business owner in Texas, contact Massingill to learn more about the...