Q1: What is the CTA?

A1: CTA is an acronym for the Corporate Transparency Act and is part of the Anti-Money Laundering Act of 2020. Passed in 2021, the CTA requests disclosure of beneficial ownership of business entities. The information will be reported and submitted to the FinCEN secure filing system.

Q2: What is FinCEN?

A2: FinCEN is the acronym for the Financial Crimes Enforcement Network of the US Department of the Treasury.

Q3: How does the CTA apply to me?

A3: The CTA mandates that reporting companies disclose their beneficial owners and any company applicants. A reporting company includes corporations, LLCs, or entities that filed documentation with their state, local, and tribal governments. Unless a business can be qualified as one of the twenty-three exemptions, it is qualified as a reporting company. Please see the following list of exemptions:

1. Securities reporting issuer
2. Governmental authority
3. Bank
4. Credit union
5. Depository institution holding company
6. Money services business
7. Broker or dealer in securities
8. Securities exchange or clearing agency
9. Other Exchange Act registered entity
10. Investment company or investment adviser
11. Venture capital fund adviser
12. Insurance company
13. State-licensed insurance producer
14. Commodity Exchange Act registered entity
15. Accounting firm
16. Public utility
17. Financial market utility
18. Pooled investment vehicle
19. Tax-exempt entity
20. Entity assisting a tax-exempt entity
21. Large operating company
22. Subsidiary of certain exempt entities
23. Inactive entity

Q4: Who can access my information once it is reported to FinCEN?

A4: The FinCEN database can be accessed by federal, state, local, and tribal officials; foreign officials need to submit a formal request to the U.S. federal government to obtain beneficial information given that it is related to national security, intelligence, or law enforcement issues. Financial institutions will have limited access to the FinCEN database and can only access data with the reporting company’s consent.

Information sent to FinCEN will be stored in a non-public database with security measures and controls to protect non-classified information.

Q5: How long do I have to gather and report this information to FinCEN?

A5: If an entity existed before January 1, 2024, the initial beneficial ownership report must be filed before January 1, 2025. Any updated reports must be made within 30 days.

If an entity was created on or after January 1, 2024, each entity must file within 90 days after receipt of notice of creation and or registration. These entities must also report their company applicants, or those who helped with the legal documentation to create the entity.

If an entity was created on or after January 1, 2025, each entity must file within 30 days after receipt of notice of creation and or registration.

Q6: What if I do not want to disclose my private information?

A6: Failure to disclose applicable BOI to FinCEN may result in both civil and criminal penalties, including but not limited to:

• Civil penalties of a minimum of $500 for each day the violation continues, without a cap.
• Criminal penalties include imprisonment for up to two years and/or a fine of up to $10,000.00.

These penalties may also apply to any individual causing an entity to not comply with the required BOI report.

Q7: What is a beneficial owner?

A7: BOI, or beneficial ownership information, is the information required in order for any reporting company to file with FinCEN. A beneficial owner includes any person who owns or controls at least 25% of ownership interests, or any individual who exercises substantial control over a company. This can include a senior officer or important decision maker that is authorized to appoint or remove any senior official, board of directors, or a similar body. Also, this includes individuals who make the decisions as to the company scope of business, finances, or structure. Anyone who meets any of the mentioned criteria is considered to have substantial control, and needs to reported as a beneficial owner.

Q8: What information do I need to include on the report?

A8: The report will be split into parts. Part one will include information about the business entity, including:

• Company legal name
• All DBAs
• Address
• State/jurisdiction
• EIN

The second part will include the following information for those who are applicable as a beneficial owner:

• Full legal name
• DOB
• Current residential address of applicant(s)
• Unique ID number and image
• US passport
• State-issued driver’s license
• ID document from local government, state, or tribe
• Foreign passport

The third part will be for those whose business was created on or after January 1, 2024, and need to disclose information about company applicants. This will be either the person at the company who filed, or a third-party individual who directs or controls filing actions on a company’s behalf. They are expected to disclose the same information as a beneficial owner.