Starting Jan. 1, 2024, many companies will be required to report information to the U.S. government about who ultimately owns and controls them. It’s the result of a 2021 law, the Corporate Transparency Act—or CTA—which requires reporting companies to file reports with FinCEN, the Financial Crimes Enforcement Network. The form isn’t yet available, but FinCEN has been rolling out guidance—including new information posted as of Dec. 12, 2023. Here’s what we know so far.
Who has to report?
Companies required to report are called reporting companies. Your company may be a reporting company and need to report information about its beneficial owners if your company is a corporation, a limited liability company (LLC), or other entity created by the filing of a document with a secretary of state or any similar office in the U.S., or a foreign company formed under the law of a foreign country that has registered to do business in the U.S. by filing of a document with a secretary of state or any similar office.
A domestic entity like a statutory trust, business trust, or foundation is a reporting company if it was created by filing a document with a secretary of state or similar office. The specifics of whether certain entity types, such as trusts, require filing a document with the secretary of state or similar office to be created or registered depend on state law.
Is a sole proprietor a reporting company?
No, unless a sole proprietorship was created (or, if a foreign sole proprietorship, registered to do business) in the U.S. by filing a document with a secretary of state or similar office. A good rule of thumb? A company qualifies as a reporting company if it was created (or, if