The Corporate Transparency Act (CTA), codified at 31 U.S.C. § 5336, is a federal law
that requires most U.S. corporations, LLCs, and other entities to report certain
beneficial ownership information to the U.S. Financial Crimes Enforcement Network
(FinCEN). The goal of the CTA is to enhance transparency and combat illicit financial
activities by preventing anonymous shell companies from being used for illegal
purposes.

The CTA became effective on January 1, 2024.

A “reporting company” is defined under the CTA as a corporation, limited liability
company (LLC), or other similar entity that is created by filing a document with a
secretary of state or similar office under the law of a state or Indian tribe, or formed
under the law of a foreign country and registered to do business in the U.S. by filing
a document with a secretary of state or similar office.

Most U.S. corporations, LLCs, and other similar entities are required to comply with
the CTA. This includes both domestic entities and foreign entities registered to do
business in the United States.

Entities must report the following information about each beneficial owner:
Full legal name
Date of birth
Current residential or business street address
A unique identifying number from an acceptable identification
document (such as a passport or driver’s license)
Additionally, entities must provide information about the identity and purpose of the
company, as specified in 31 U.S.C. § 5336(b)(2)(E)-(F).

Certain entities are exempt from the reporting requirements of the CTA, including:
Publicly traded companies registered under section 12 of the Securities
Exchange Act of 1934 or that are required to file reports under section 15(d)
of that Act.
Entities employing more than 20 full-time employees in the U.S., with
an operating presence at a physical office within the U.S. and filed a federal
income tax return in the previous year showing more than $5 million in gross
receipts or sales.
Regulated entities such as banks, credit unions, broker-dealers, investment
companies, and insurance companies that are already subject to federal
oversight and beneficial ownership disclosure requirements.
Inactive entities that were in existence on or before January 1, 2024, and
meet specific criteria related to activity and ownership

The Corporate Transparency Act (CTA) mandates that certain business entities in the
United States provide beneficial ownership information to the Financial Crimes
Enforcement Network (FinCEN). Non-compliance with the CTA can result in
significant penalties. Here are the key penalties and consequences for non-
compliance:
Civil Penalties
1. Failure to Report:
Entities that fail to report beneficial ownership information as required
by the CTA may face civil penalties.
Fine: Up to $500 per day that the violation continues.
2. Inaccurate or Incomplete Reporting:
Entities that submit reports containing inaccurate or incomplete
information may also be subject to civil penalties.
Fine: Up to $500 per day that the violation continues.
Criminal Penalties
1. Willful Failure to Report or Willfully Providing False Information:
Willfully failing to report or willfully providing false or fraudulent
beneficial ownership information is considered a criminal offense under
the CTA.
Fine: Up to $10,000.
Imprisonment: Up to two years.
As stated in 31 U.S.C. § 5336(h)(3)(A)-(B):
“Any person who knowingly provides, or attempts to provide, false or fraudulent
beneficial ownership information, or who willfully fails to report complete or updated
beneficial ownership information… shall be liable to the United States for a civil
penalty of not more than $500 for each day that the violation continues or has not
been remedied, and may be fined not more than $10,000, imprisoned for not more
than 2 years, or both.”

Businesses created before January 1, 2024 must file their initial reports
by December 31, 2024.
Businesses established after January 1, 2024 are required to report
within 30 days of their creation or registration.

Adams Law USA offers comprehensive services to help businesses comply with the
CTA, including:
Detailed reporting and documentation: Ensuring all required information
is accurately reported to FinCEN.
Continuous compliance monitoring: Keeping your business updated with
any changes in reporting requirements and deadlines.
Expert legal advice and support: Providing guidance on complex
compliance issues and ensuring your business adheres to all legal obligations
of the CTA.
We make the mandated regulatory compliance process easier by handling all the
necessary reporting details

You can contact us via:
Phone : (725) 400-8863
Email : BOIR@adamslawusa.com
Address : 10161 Park Run Drive Ste 150, Las Vegas, NV 89145