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Understanding the Corporate Transparency Act

MSK Client Alert
April 17, 2024

As of January 1, 2024, significant new reporting requirements have come into effect with the Corporate Transparency Act (the “CTA”). In general, the CTA is a new federal law that requires most US-based entities, and certain foreign entities (collectively, “Reporting Companies”), to report detailed information about their “Beneficial Owners” and “Company Applicants” to the Financial Crimes Enforcement Network (“FinCEN”), a bureau of the US Department of the Treasury.  It is crucial to understand these new mandatory requirements and ensure compliance to avoid penalties. [1]

Summary of key points under the CTA:

Compliance options:

  1. 1. Self-Compliance: You can complete the registration process on your own here:
  2. 2. Legal Service Providers: Engage a third-party legal service company. We can provide a list of recommended providers upon request.
  3. 3. Our Firm's Assistance: Our team is ready to handle the compliance process for you. If you choose this option, you will need to complete a questionnaire, which we will provide to you. In addition, you are required and agree to obtain a FinCEN ID number if this option is selected. We will rely solely on the information you provide and will not be responsible for any misrepresentations. Furthermore, our representation concludes once the initial filing is made, and you will be responsible for any future filings due to changes in ownership or other reasons, unless otherwise agreed upon in writing.

We understand that these regulations are complex, and our goal is to ensure a smooth transition for your company. Please do not hesitate to reach out with any questions or for further clarification.

[1] A Federal District Court recently ruled that the CTA is unconstitutional.  The relief from this ruling currently applies only to the named plaintiffs, which include the members of the National Small Business Association. Accordingly,  companies other than the named plaintiffs in the District Court case must still comply with the CTA. 

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