Federal legislation enacted on January 1, 2021 and effective on January 1, 2024, the CTA is intended to aid law enforcement in combatting money laundering, tax fraud, terrorism financing, and other illicit activity conducted through anonymous shell companies (31 U.S.C. § 5336).

The CTA's reporting requirements are intended to be broadly applicable, and may principally impact small companies, rather than large or otherwise highly regulated entities, many of whom will be exempt. There are 23 categories of exempt entities under the CTA. There are civil and criminal penalties for failing to comply with the CTA.

The CTA requires "reporting companies" under its rules to file with the US Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) certain information about the reporting company and personal information for two categories of individuals:

Under FinCEN's final beneficial ownership information (BOI) reporting rule (31 C.F.R. § 1010.380), any US reporting company formed or, in the case of a foreign reporting company, registered to do business in the US:

Reporting companies must also update their BOI report with any changes to previously reported information within 30 calendar days of the change.

FinCEN will maintain the reported BOI in a nonpublic database accessible only in certain circumstances by a limited number of authorized entities.

For more information, see Practice Note, Corporate Transparency Act (CTA) Beneficial Ownership Reporting.