Corporate Transparency ActX

Summary

• The Corporate Transparency Act is intended to provide law enforcement with beneficial ownership information for the purpose of detecting, preventing and punishing terrorism, money laundering and other misconduct through business entities.
• It places a significant burden on small businesses required to collect beneficial ownership information.
• More clarity and precision with respect to the requirements is required reduce the burden on reporting companies and applicants as well as increasing compliance and the value of the information reported.
• The Anti-Money Laundering Act of 2020, which is part of the National Defense Authorization Act for Fiscal Year 2021 (“NDAA”) and includes the Corporate Transparency Act, became law effective with Congress’ override on January 1, 2021 of former President Trump’s veto of the NDAA. 1 

   The Corporate Transparency Act requires certain business entities (each defined as a “reporting company”) to file, in the absence of an exemption, information on their “beneficial owners” with the Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Department of Treasury (“Treasury”). The information will not be publicly available, but FinCEN is authorized to disclose the information