The Corporate Transparency Act requires millions of small business entities to disclose information about their beneficial owners to the federal government.
By Drew Viguet
National Agricultural Law Center
U of A System Division of Agriculture
Fast facts:
- Deadline to file under CTA is Dec. 31
- Reporting is done entirely online
- National Ag Law Center has CTA factsheet available
FAYETTEVILLE, Ark. — The deadline is fast approaching for many businesses across the country to file with the federal government.
The Corporate Transparency Act, or CTA, requires millions of small business entities to disclose details of their beneficial owners through a Beneficial Ownership Information, or BOI, report. The report is filed through the U.S. Department of Treasury’s Financial Crimes Enforcement Network, or FinCEN.
The purpose of the CTA is to reduce financial crimes, such as money laundering, by taking stock of ownership information of businesses that operate within or have access to the U.S. market. The CTA is not new, having been enacted in 2021 as part of the National Defense Authorization Act. Its reporting requirements went into effect on Jan. 1, 2024.
Reporting companies must include information identifying “beneficial owners” of the business, including name, date of birth, address, and a copy of some specific forms of identification, such as a driver’s license or a passport.
In addition, companies created or registered after Jan. 1, 2024, must also include personal identifying information about the individuals responsible for the filing. Reporting is done entirely online.
Elizabeth Rumley, senior staff attorney at the National Agricultural Law Center, or NALC, said the CTA is a significant topic not just for those in agriculture, but also for all business owners.
“The CTA is an attempt at cataloguing a national corporate database that tracks U.S. business ownership,” Rumley said. “It’s one of the biggest topics that we have discussed with stakeholders this year, and its reach goes far beyond agriculture. The CTA impacts millions of the nation’s small business entities, and there are just over two months left to report.”
Rumley noted that there are potential significant consequences for failing to comply, including fines or imprisonment.
“There are certain entities that are exempt from filing, but the default assumption of small business owners should be to file, or confirm that they are exempted, by Dec. 31,” she said.
Getting the word out
As the nation’s leading source of agricultural and food law research and information, the NALC has made it a key part of its mission in 2024 to spread word of the CTA ahead of the December filing deadline. Part of that approach has been the creation of a CTA factsheet, which is available online on the NALC website. The factsheet was authored by former NALC Research Fellow Caitlin Robb and Rumley.
To read the full news release, click here.