Beginning January 1, 2024, the Corporate Transparency Act (“CTA”) will officially go into effect, which requires additional reporting obligations on U.S. entities and foreign entities doing business in the United States to provide beneficial ownership information to the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”). Congress established that the general intent of the CTA is to prevent illicit activities, including money laundering, financing terrorism, tax fraud, and other harmful activities related to national security interests, from occurring through the use of entity schemes. The CTA applies to any corporation, limited liability company, or other similar entity (limited partnership; limited liability partnership; limited liability limited partnership) that files an application (e.g., Certificate of Organization/Incorporation filed with the Secretary of State) under the laws of a State or Indian tribe, subject to certain exemptions. As a result, the CTA will impose the reporting burden on many farmers, landowners, and other industry professionals.

Who Must Report?

U.S. entities (and foreign entities doing business in the United States) that are either a corporation, limited liability company or other company created by the filing of a document with a secretary of state or any similar office under the law of a State or Indian tribe must report the beneficial ownership information of the entity unless the entity is exempt. There are 23 types of entities exempt from the beneficial ownership information reporting requirement, which mainly exempt publicly traded companies, banks, credit unions, large operating companies, companies subject to securities laws, and non-profits. Therefore, single-member LLCs, family farm entities, and other small entities are subject to the reporting requirements of the CTA.

What Information is Reported and Collected?

A reporting company must provide its legal name, trade name(s), street address of its principal place of business, jurisdiction of formation, and Taxpayer Identification number. In addition, the reporting company must provide the following information for each beneficial owner and company applicant:

• The individual’s name.
• Date of birth.
• Residential address.
• An identifying number from an acceptable identification document such as a valid passport or U.S. driver’s license.

When is the Report Due?

Reporting companies can start submitting their reports beginning January 1, 2024. Any reporting entity created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial beneficial ownership information report. Any reporting entity created or registered between January 1, 2024, and January 1, 2025, will have 90 calendar days after receiving actual notice that the entity has been created to complete the initial beneficial ownership information report. Any reporting entity created or registered on or after January 1, 2025, will have 30 calendar days after receiving actual notice that the entity has been created to complete the initial beneficial ownership information report.

Who Can Access Beneficial Ownership Information Filed According to the CTA?

Beneficial ownership information collected under the CTA is sensitive information and will not be made available to the public. Federal, State, local, and Tribal officials, and certain foreign officials who submit a request through a U.S. Federal government agency may be able to access information collected under the CTA for national security, intelligence, and law enforcement purposes. Reporting companies may also consent to financial institutions having access to the reported information, which will also grant access to the financial institutions’ regulators.

This article has been prepared for informational purposes only. It is not a legal opinion; it does not provide legal advice for any purpose; and it neither creates nor constitutes evidence of an attorney-client relationship. Please contact your attorney for advice regarding your specific situation.