CTA for Small Businesses -- Who is a Company Applicant?

As part of our series on the Corporate Transparency Act for small companies, we previously covered information that must be reported by covered companies, including information about the “company applicant.” Who, then, is a company applicant that must be identified to FinCEN in the company's CTA report?  

First, it is important to note that only companies formed (or registered) after the CTA takes effect must identify their company applicant(s). Thus, if your company was formed (or was a foreign company qualified to do business in the US) via a filing with the secretary of state prior to 2024, you are not required to report company applicant details.

For companies formed on or after 1/1/2024, your CTA filing must identify at least one, and up to two, company applicants. These fall into two categories:

• The person who “directly filed” the relevant filing with the secretary of state to create or register the company; and
• If applicable, the person who was “primarily responsible for directing or controlling" that filing.  

Thus, for example, if a solo entrepreneur filed a document using the secretary of state's business portal to bring a company into being, that sole entrepreneur is likely the only company applicant. If the entrepreneur used a law firm to create the company, and the law firm's paralegal filed the incorporation documents with the secretary of state, the paralegal is probably the direct company applicant.  

Determining the “direct” company applicant is likely to be fairly straightforward in most cases. There may be instances where it is more difficult to determine who was “primarily responsible” for the formation of the company – for example if there are multiple shareholders in a start-up. Because of the complexities of this question, a careful consideration of the CTA and implementing rules may be required.