The 2024 Corporate Transparency Act: Simplified

In 2021, the U.S. Congress enacted the Corporate Transparency Act (CTA) within the broader William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021. This legislative move brought forth significant alterations to the regulatory landscape pertaining to financial integrity and anti-money laundering measures.

Under the CTA, the vast majority of business owners will be required to submit their beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN), a component of the U.S. Treasury Department. While certain specific exemptions exist (a total of 23), the reporting obligation applies to most businesses.

Newly established entities are obliged to submit this report within 90 calendar days of their formation or incorporation, whereas pre-existing entities are mandated to file a beneficial ownership report by the conclusion of the 2024 calendar year. 

The CTA is aimed at bolstering transparency in the corporate sphere and enhancing the government's ability to detect and combat illicit financial activities such as money laundering.

Acronym Key

CTA: Corporate Transparency Act
BOI: Beneficial Ownership Information
FinCEN: Financial Crimes Enforcement Network