Select Page
Corporate Transparency Act – Beneficial Ownership Reporting: Are You Prepared?

he Corporate Transparency Act (CTA), enacted as part of the Anti-Money Laundering Act of 2020, introduces significant changes in beneficial ownership reporting requirements for certain entities operating in the United States. These regulations, set to take effect on January 1, 2024, aim to enhance transparency and combat financial crimes by mandating the disclosure of beneficial ownership information. In this blog post, we will delve into the key aspects of the CTA, explore who is required to report, and discuss the implications of noncompliance.

Understanding the Corporate Transparency Act

The CTA establishes standardized reporting requirements for corporations, limited liability companies (LLCs), and similar entities registered or created within the United States. The Financial Crimes Enforcement Network (FinCEN) is authorized to collect and share this information with authorized government entities and financial institutions, subject to stringent safeguards and controls. This legislation is a crucial component of the Anti-Money Laundering Act of 2020 (AML Act), aimed at preventing illicit money and property from being hidden in the United States.


Who Must Report?

Reporting under the CTA applies to various entities, including corporations, LLCs, and those created or registered through state or similar offices. While there are exemptions for specific entities, such as governmental authorities and certain financial institutions, many entities will be subject to reporting requirements.


Eligible for Exemption:

Entities exempted from reporting include banks, credit unions, money services businesses, broker-dealers, investment companies, insurance companies, and more.

  • Pooled investment vehicles may be exempt if they meet specific criteria, such as being advised by a registered entity.

Not Eligible for Exemption:

  • Entities not eligible for exemption encompass foreign private advisers, family offices, subsidiaries of private funds, certain pooled investment vehicles, and others.

 Information to Be Reported:

Entities required to report must provide detailed information, including:

  • Full company name, Doing Business As (DBA), address, jurisdiction of formation or registration, and Tax Identification Number (TIN) or other unique tax ID.
  • Beneficial owner details, such as full name, date of birth, address, and photo ID with ID number shown.
  • Company applicant information (for new reporting companies).
  • Unique FinCEN identifier (for individuals who submit information directly to FinCEN).


Who Is a Beneficial Owner?

A beneficial owner is an individual who directly or indirectly exercises substantial control over the reporting company or owns or controls at least 25% of its ownership interests. This definition includes senior officers, decision-makers, and individuals with substantial influence.

Dates and Consequences

New entities must file their initial reports by January 1, 2024, within 30 days of creation or registration. Existing entities have until January 1, 2025, to file their initial reports. Timely updates and corrections to beneficial ownership information are also required within 30 days.

Noncompliance or misuse of beneficial ownership information can result in civil and criminal penalties, including fines and imprisonment. It’s essential to understand the nuances of these reporting requirements and take proactive steps to ensure compliance.



The Corporate Transparency Act represents a significant shift in the regulatory landscape for businesses operating in the United States. To avoid potential penalties and ensure compliance, it’s crucial to be well-prepared for these reporting requirements. With the deadline for new entities approaching in less than a year, taking proactive measures is essential.

If you believe your entity may be subject to reporting under the CTA or if you have any questions about compliance, we encourage you to reach out to us well in advance of the reporting deadlines. Our team is here to assist you in navigating these complex regulations and ensuring your business remains in compliance with the law. Stay ahead of the curve and protect your business by preparing for the Corporate Transparency Act today.


The Molen & Associates Difference

Mike Forsyth

“Super helpful and timely. This is our first year with them and we look forward to trusting them with our taxes and business books for years to come.”

Caitlin Daulong

“Molen & Associates is amazing! They run an incredibly streamlined process, which makes filing taxes a breeze. So impressed with their attention to detail, organization, and swift execution every year. Cannot recommend them enough!”

Sy Sahrai

“I’ve been with Mr. Molen’s company for few years and I felt treated like family respect and dignity. They are caring, professional and honest, which hard to find these days. Love working with them.”

The IRS is Cracking Down on S-Corp Salaries: How To Your Reasonable Compensation is Safe

The IRS is turning its attention to S-Corporations (S-Corps) and the salaries paid to shareholder-employees. Ensuring that you are paying yourself a "reasonable compensation" is crucial to staying compliant with the law and avoiding potential financial consequences....

Should You Be Making Quarterly Payments?

Tackling your taxes as a small business owner can often feel like a high-stakes game of strategy and a little guesswork. One of the key moves in this intricate game is mastering the art of quarterly tax payments. If you're looking to stay ahead in the tax arena and...

Slash Your Self-Employment Tax

Hey there, hardworking small business owners! Tax season is no walk in the park, but we've got a game-changing secret to share that could put more money back in your pocket. If you're tired of paying hefty self-employment taxes and want to keep more of your...

How Tax Planning Can Help You Grow, Preserve and Protect Your Wealth

Tax planning services from Molen & Associates help you make smart decisions regarding your taxes. We provide individualized advice and information that can save you money and protect your wealth. Our tax planning strategies go beyond just filing your taxes – we...

Why a Local Family Tax Firm is Your Best Co-Pilot in Space City!

Howdy, Houston small business owners! Tax time can be a real whirlwind, but fear not – we've got your back! When it comes to saving time, money, and headaches on your taxes, partnering with a local family tax firm can be the ultimate secret weapon. In this article,...

Uncovering the Top 5 Deductions to Save Time, Money, and Stress!

Howdy, fellow Houstonians! As small business owners in the heart of Texas, we know that taxes can be a daunting and complex puzzle to solve. But fret not, because today, we're here to equip you with some mighty tax hacks that will not only save you time and money but...

Streamline Your Finances with Molen & Associates: The Power of Corporate Accounting

In the fast-paced corporate world, managing finances with precision and expertise is paramount for the success of any business. Corporate accounting plays a vital role in ensuring that financial records are accurate, compliant, and capable of driving informed...

Mastering Your Numbers: The Secret to Small Business Tax Triumph!

Hey there, fellow small business owners! As entrepreneurs, we know that taxes can be a bit overwhelming, especially when you're trying to run a successful business. But fear not – we're here to equip you with the ultimate tax-saving superpower: mastering your numbers!...

Should I Get Life Insurance For My Kids?

Should I Get Life Insurance For My Kids? No parent wants to consider the possibility of collecting a death benefit on their child's life. And this is the reason many families are exploring the option of investing in a child life insurance policy to ensure their...

The Tax Time Warp: Why Retirement May Bring Higher Tax Rates Than Your Earning Years

The Tax Time Warp: Why Retirement May Bring Higher Tax Rates Than Your Earning Years   As small business owners, we strive to save time, money, and headaches when it comes to our taxes. However, there's an unexpected twist that awaits us in retirement: the...

Request an Appointment Today

1 + 5 =

Call us at

Pin It on Pinterest

Share This