Corporate Transparency Act
Background on the CTA and FinCen
As a corporate owner or practitioner, you have a new federal government imposed reporting requirement which is anticipated to become effective in 2Q 2022. With the enactment of the Corporate Transparency Act (CTA) and the proposed rules by the U.S. Department of Treasury’s federal Financial Crimes Enforcement Network (FinCen), most small businesses, start-ups, and a number of other entities (such as private equity, family offices, and international businesses) will have an obligation to file a report with FinCen on their beneficial owners – which include persons holding 25% or more of the equity of the entity, or have substantial control. These rules are complex and in some cases will include persons who hold considerably less than 25% of the company’s ownership. Klemchuk has put together a checklist to assist businesses in assessing whether they have a reporting obligation and the steps necessary to comply.
Corporate Transparency Act Checklist
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Eight Steps for Complying with the Corporate Transparency Act (CTA)
Step 1. Determine if the company a Reporting Company under the Corporate Transparency Act (CTA) and the proposed FinCen rules.
Step 2. Determine who are considered Beneficial Owners of the Reporting Company.
Step 3. Determine if any of the Beneficial Owners are exempt from reporting.
Step 4. Gather Information for reporting Beneficial Owners.
Step 5. Gather Information about the Reporting Company.
Step 6. Determine who will be the company Applicant.
Step 7. Gather information about the company Applicant.
Step 8. File information with FinCen within the timeframes required under the rules.