Corporate Transparency Act

The Corporate Transparency Act (CTA) is a federal law enacted in 2021 that requires most U.S. companies — including LLCs, corporations, and similar entities — to report their beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN). The law targets shell companies used for money laundering, tax evasion, and terrorism financing by creating a national beneficial ownership registry. Companies formed before January 1, 2024, had until January 1, 2025, to file initial BOI reports, while entities formed after that date must file within 90 days of formation. A beneficial owner is any individual who directly or indirectly exercises substantial control over the entity or owns/controls at least 25% of its ownership interests. Required information includes the beneficial owner's full legal name, date of birth, residential address, and a government-issued identification number (driver's license or passport). Penalties for non-compliance are severe: willful failure to file carries civil penalties of up to $591 per day and criminal penalties of up to $10,000 and/or two years imprisonment. Exemptions apply to 23 categories of entities, including publicly traded companies, banks, credit unions, and entities with over $5 million in gross receipts and more than 20 full-time employees. The CTA affects an estimated 32.6 million existing entities and 5 million new entities annually. doola manages BOI reporting for its clients as part of its formation and ongoing compliance services, ensuring timely filing and accurate beneficial ownership disclosures that keep businesses in compliance with federal requirements.