March 8, 2021 | less than a minute read

What You Need to Know about the Corporate Transparency Act

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Joel I. Papernik

Member

Get in touch

Joel I. Papernik

Member

Included in the National Defense Authorization Act for 2021, which was passed over then by President Trump’s veto, was something called the Corporate Transparency Act. This law, when it becomes effective after the 1st of January 2022, by which time regulations will have been adopted, will require U.S. businesses to file beneficial ownership information.

While we are not aware of anything having been published with respect to proposed regulations, it is expected that the disclosure of beneficial ownership requirements will have wide ranging ramifications in many areas, including estate planning, private equity transactions, and private companies generally. Some are beginning to make plans that will anticipate the future even though the details of those requirements are not yet available.

The CTA requires companies in the U.S. to file a report that provides the name, date of birth, current address, and unique identification number (from a passport or driver’s license, for example) of the company’s “beneficial owner(s)” to FinCEN, a bureau of the U.S. Treasury Department... The CTA will impose new burdens on many entities operating in the U.S and is likely to have significant implications for foreign and domestic businesses. Required compliance with the CTA does not start until January 2022, the deadline for Congress to enact the regulations.