By Scott P. Borsack, Esq. & Max H. Steinberg, Esq.

We live in an ever more connected world which seems to get smaller each day. Financial transactions move at near the speed of light. Criminals and bad actors can pervert the tools and techniques developed to assist legitimate businesses to facilitate commerce to advance their nefarious purposes. Complex legal structures stretching across numerous jurisdictions have made the role of law enforcement ever more difficult. In recent years the United StatesDepartment of Treasury, as the result of new laws and regulations have caused financial institutions to learn more about their customers and their activities. Those who have been engaged in foreign currency transactions or maintain financial accounts across the world have had to disclose those dealings to a branch of the United States Treasury for more than a decade. It is against this background that the Corporate Transparency Act (the “CTA”) was enacted. As a result of the passage of the CTA, millions of entities in the United States have new disclosure obligations and face stiff penalties for failing to comply the with the law.

Application of the law is being phased in during the 2024 calendar year:

  • Registration under the CTA for legal entities formed on or after January 1, 2024 but before January 1, 2025 must be completed within 90 days of formation.
  • For entities formed on January 1, 2025 or thereafter, registration must be completed within 30 days of formation.
  • Compliance with the CTA for entities that existed before January 1, 2024 must be completed before December 31, 2024.

Failure to comply with the registration requirement can result in a fine of as much as $10,000, assessed at $500 for each day that registration is not completed when due. The CTA is no joke. There are a host of exceptions to the CTA, generally for legal entities with visibility in commerce. For example, banks, credit unions, tax-exempt entities and thosethat employ 20 or more individuals from a physical office in the United States and which has gross revenue of at least $5 million. Those entities, which do not engage in any business activity, do not have a reporting obligation.

CTA is enforced by the Financial Crimes Enforcement Network (FinCEN for short) which was established by the United States Department of Treasury. As its name suggests, FinCEN connects law enforcement, financial and regulatory agencies both in the United States and abroad. At one time FinCEN’s primary responsibility included enforcement of the Bank Secrecy Act. Individuals with interests in foreign bank accounts have been reporting theexistence of those accounts to FinCEN for many years. Reporting under the CTA is accomplished through the FinCEN landing page located at You should note that the references to this reporting obligation are identified on FinCEN’s website under Beneficiary Ownership Information.

CTA requires that an entity with a reporting obligation identify individuals who exercise substantial control over the entity which is generally understood to be officers of the entity and those who can make significant decisions for the entity. It also includes individuals owning 25% or more of the ownership interest in the entity. The name, date of birth, home address and form of government identification of each such individual must be provided. Generally a drivers’ license or passport will satisfy the identification requirement.

The database created from all of the registrations provided is intended to advance the interests of law enforcement both domestically and internationally. Federal, state and local law enforcement will be able to request access to information reported under the CTA. Law enforcement will be able to use the database to identify beneficial owners of complex legal structures utilized to conceal criminal behavior. Financial institutions will be able to gain access to submissions by a legal entity if permission is granted by the reporting entity. Banks and other financial institutions will be able to use the database to confirm beneficial ownership information provided by customers.

The CTA was first enacted in 2020 with wide spread bi-partisan support in both houses of Congress, as part of the National Defense Authorization Act. Congress directed that the Treasury Department release regulations for enforcement by 2022 and that the CTA become effective in 2023. Due to the complexities of the CTA, the effective date was extended into 2024. FinCEN publishes a weekly newsletter to address regulatory changes and interpretative issues which arise in CTA enforcement. As an evolving area of law enforcement, access to competent legal advice about theCTA is essential.

It is worth noting that the landscape of the CTA and FinCEN’s reporting requirements is dynamic and still developing. As more detailed information is released by FinCEN, updates and clarifications will be provided regularly to ensure accuracy and compliance. If your company has any additional questions or requires assistance with the application process, please do not hesitate to contact our offices at 609-275-0400 or email or We are committed to providing the necessary support and guidance to facilitate a smooth and compliant transition for your business.