The New Corporate Transparency Act

Beginning January 1, 2022, a new federal law called the Corporate Transparency Act (CTA) requires every “reporting company” (almost all LLCs, corporations and similar entities are reporting companies) to file a report with the U.S. Financial Crimes Enforcement Network
(FinCen) shortly after the reporting company is created. Reporting companies formed before January 1, 2022, must file the required report with FinCen within two years of the effective date of the U.S. Treasury’s CTA regulations.

If the reporting company was formed after 2021 it must file its CTA report with FinCen not later than fourteen days after the entity was formed. If the reporting company was formed before January 1, 2022, it must file its CTA report with Fin Cen not later than one year after the date the U.S. Treasury Regulations for the CTA become final. At this time the regulations have not been proposed so nobody knows when the regulations will become final and the CTA report for pre-2022 or post 2021 entities will be due.

If the reporting company is a limited liability company it should cause the members to become obligated to deliver to the company before the FinCen filing deadline all of the required information. This should be done by adding language to the LLC’s Operating Agreement that notifies the members of the CTA required information, obligates them to provide the information by a specific date and fines them for failing to deliver all of the required information by the company’s deadline.

The U.S. Treasury has also not proposed or finalized the regulations that describe how entities file the CTA report with FinCen. Therefore, it is not possible at this time to comply with this new entity filing requirement.