Like many small business owners, you’ve probably been wondering how to file your corporate transparency act reports. The Corporate Transparency Act (CTA) was enacted on January 1st, 2021, as part of Congress’s ongoing battle against fraud and money laundering. The Corporate Transparency Act stems from the much older Bank Secrecy Act, which required companies to keep files and provide regular reports that enabled the government to monitor their activity.
The CTA operates in a similar manner. First, you’ll need to check, to make sure you are one of the U.S. companies required to file a report under the CTA, also known as the beneficial ownership FinCEN report. Most likely, if you are reading this, you are, so we’re here to make filing that report easier.
Gather your information
Keep in mind that the final requirements have not been made public at the time of this writing. However, we’re using reliable sources to estimate the required information for your CTA report.
Your company’s Corporate Transparency Act report will likely ask that you provide the following information:
- Company name and DBA (Doing Business As), if applicable;
- Year and state of founding;
- Federal Employer Identification Number (FEIN);
- Company Registration Number;
- Office Address.
That’s the first part of the report. The second part explains why it’s known as the beneficial ownership FinCEN report – you’re also asked to provide identifying information on your beneficial owners.
According to FinCEN, a “beneficial owner” is someone who:
- Has substantial control over the entity making decisions (may mean serving as a senior officer, or having the authority to appoint senior officers/board members, or just providing direction).
- Owns/controls at least 25% of the entity’s ownership interests (equity in the company, profit interests, warrants/rights, convertible instruments, etc.).
A beneficial owner will be required to provide their own identifying information, most likely:
- Full Name;
- Date of Birth;
- Social Security Identification Number (SSIN);
- Nationality;
- Role in Company;
- Residential Address;
- Identifying Document.
On behalf of its beneficial owners, reporting companies will also be required to provide ID-type pictures in their final report. Alternatively, if the beneficial owners of said company do not wish to supply their information through the reporting company, they may instead apply for a FinCEN reporting number.
How will the CTA report be filed?
Again, although the final information on this front hasn’t been made public yet, Northrop Grumman (who seem to have designed the filing software for the CTA report) indicated that an e-filing system is expected to be up and running by late 2022/early 2023.
As such, it’s likely that FinCEN will release an online filing system for the reports, and/or provide reporting companies with a PDF filing method. This assumption is based on the filing system already in use by similar agencies for IRS and 1099 forms.
