The law requires corporations and LLCs to file beneficial ownership information with FinCEN

Small businesses in the U.S. and abroad are facing additional compliance challenges in the wake of new details published last month about pending obligations under the Corporate Transparency Act (CTA), which requires business entities to file a beneficial ownership information report with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). The latest installment of Wolters Kluwer CT Corporation’s Expert Insights podcast breaks down many of the parameters outlined in FinCEN’s final rule, including the types of entities that fall under the CTA’s mandate, the kind of information they have to report, and timetables for compliance.

Sandra Feldman, Publications Attorney at Wolters Kluwer CT Corporation, explains that the CTA was designed to help law enforcement crack down on money laundering and other illicit activity inside the U.S. financial system. FinCEN estimates that 32.6 million entities – or “reporting companies” under the CTA – will fall under the purview of the rule once it goes into effect on January 1, 2024, with an additional 5 million companies added each year. Companies founded prior to that date will have until January 1, 2025 to file their initial beneficial ownership information report, while new entities will be required to file a report within 30 days of receiving notice of their creation or registration.

“When you take into account the various exemptions in place, this is really a reporting requirement on small businesses,” Feldman said.

The CT Expert Insights podcast examines topics related to business licensing requirements and other developments that are of importance to corporations, LLCs and small businesses. Previous installments have explored the popularity of holding company structures, the pros and cons of S Corporation status and compliance challenges in the pharmaceutical industry.

For nearly 130 years, Wolters Kluwer CT Corporation has been the leading provider of registered agent services, incorporation services, and legal entity compliance. It is part of Wolters Kluwer’s Governance, Risk & Compliance (GRC) division and has a global reach into over 150 countries. More than 75 percent of Fortune 500 companies, 95 percent of AmLaw 100 law firms, and 350,000 small businesses trust CT Corporation to handle their compliance needs. The other legal services business of Wolters Kluwer GRC is Wolters Kluwer ELM Solutions. The division’s banking and regulatory compliance businesses are Wolters Kluwer Compliance Solutions and Wolters Kluwer Finance, Risk & Regulatory Reporting.

About Wolters Kluwer Governance, Risk & Compliance

Governance, Risk & Compliance is a division of Wolters Kluwer, which provides legal and banking professionals with solutions to help ensure compliance with ever-changing regulatory and legal obligations, manage risk, increase efficiency, and produce better business outcomes. GRC offers a portfolio of technology-enabled expert services and solutions focused on legal entity compliance, legal operations management, banking product compliance, and banking regulatory compliance.

Wolters Kluwer (WKL) is a global leader in professional information, software solutions, and services for the healthcare; tax and accounting; governance, risk and compliance; and legal and regulatory sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2021 annual revenues of €4.8 billion. The group serves customers in over 180 countries, maintains operations in over 40 countries, and employs approximately 19,800 people worldwide. The company is headquartered in Alphen aan den Rijn, the Netherlands.

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