Is Your Company Exempt from the Corporate Transparency Act

Many people are wondering if their company is exempt from the Corporate Transparency Act, now that the implementation date is less than ten months away.  The FinCEN Report Company has compiled an index to all 23 exemption categories that make it easy to spot a category that might apply. 

Corporate Transparency Act Implementation Date

The Corporate Transparency Act will take effect January 1, 2024.  Any reporting company in existence on or before that date will have until December 31, 2024 to file an initial report.  Any reporting company formed after that date will need to file an initial report within 30 calendar dates are its date of formation.

Beneficial Ownership Report Contents

A reporting company will need to file a beneficial ownership report that provides, for each beneficial owner, (i) full legal name, (ii) date of birth, (iii) residential address, (iv) a unique identifying number (which may be a non-expired drivers license or passport), and (v) an image file of the document that provides the unique identifying number.

FinCEN - the Financial Crimes Enforcement Network of the U.S. Treasury - will maintain a confidential database of company beneficial ownership data.  The U.S. Treasury will use the database to fight money-laundering, and U.S. law enforcement agencies will have easy access to the data.

U.S. Banks will have access to their customers' data if their customers consent.  (You should expect that banks will start requiring such consent in their standard customer contracts fairly soon.)

Which Companies are Exempt?

FinCEN exempted 23 categories of companies from the requirement to file a beneficial ownership report. Some of those categories include:

• Issues of public securities
• Banks
• Credit Unions
• Bank Holding Companies and Credit Union Holding Companies
• Licensed Broker-Dealers
• Some tax-exempt entities

Most exemption categories require legal advice to compare the company's status to the requirements of the exemption.