The Corporate Transparency Act (CTA) was enacted as part of the Defense Reauthorization Act in late 2021. The CTA’s purpose is to help prevent and combat money laundering, terrorist financing, tax fraud, corruption and other criminal activity. The CTA intends to meet these goals by creating a reporting system with the Financial Crimes Enforcement Network (FinCEN). Final rules have been adopted and the new reporting system is scheduled to launch on January 1, 2024.

If you own a small business, you may fall under the new reporting requirements. For purposes of the CTA, a “reporting company” is defined as: (1) a corporation; (2) a limited liability company; or (3) any entity that is created by the filing of a document with a secretary or state (including limited partnerships and limited liability partnerships). There are many exceptions to this general definition depending on certain factors, including the size of the business and whether it is already regulated.

Each reporting company will need to file a report listing certain information about both the company itself and personal identifying information about each individual beneficial owner of the company. Beneficial owners include any individual who, directly or indirectly, exercises substantial control over the reporting company or who owns or controls at least 25 percent of the ownership interests in the company. Depending on the ownership structure of your business, determining the identity of the beneficial owners may be a challenge!

Businesses in existence prior to January 1, 2024 (when the new reporting system is scheduled to launch) have until December 31, 2024 to file their initial reports. New businesses (those formed after January 1, 2024) will need to file their initial reports within 30 days of their creation. FinCEN estimates that more than 32 million initial reports will be filed in 2024.

What should you do to prepare? First, determine whether your business will be considered a “reporting company” for the CTA. If so, then you should start determining the identity of your beneficial owners and reach out to them to discuss these new reporting requirements.

If you need assistance with reviewing the regulations and determining your obligations, we are here to help.

Kathryn Diehm is a business attorney with Rucci Law Group, LLC. She has experience with all areas of business law. Kate can be reached at 203-202-9686 or at