The Corporate Transparency Act
The Corporate Transparency Act (CTA) is aimed at enhancing corporate transparency and combating financial crimes, particularly money laundering and terrorist financing. Noncompliance with the CTA may result in significant fines and prison terms.
Real Estate Companies & Investment Sponsors – Don't Wait to Assess Your Reporting Requirements Under the Corporate Transparency Act
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The primary purpose of the CTA is to combat significant crimes Congress believes are committed through business entities in the United States. The potential burden on law abiding real estate investment companies, however, is significant. This article delves into the CTA's applicability to common investment and sponsor entities, outlines potential exemptions, and emphasizes the need for early compliance assessment.
The CTA was enacted to help with U.S. anti-money laundering laws. Under the CTA, your business entities may be required to e-file a Beneficial Ownership Information Report with the Treasury Department's Financial Crimes Enforcement Network and that report will contain personal identifying information about the business entity’s “beneficial owners” and “company applicants.”
California Senate approved SB 1201, requiring corporations and LLCs to publicly disclose beneficial owners from January 1, 2026. This expands federal CTA rules and mandates biennial reporting of owners' names and addresses, accessible online.
The CTA will require at least 32.6 million companies to register the company and its beneficial owners with FinCEN in 2025. This article discusses in brief the Act’s requirements and the qualifications of certain available exemptions from registration.
How We Can Help
Our team of CTA-focused attorneys can assist you with determining your company’s status as a reporting company for purposes of the CTA and whether an exemption applies. In the case of reporting companies, we provide additional guidance on compliance obligations, including evaluating beneficial ownership. If requested, we also assist clients with filing their BOI Reports or could refer you to third-party vendors.
Online Resources
FinCEN ID Application for Individuals
How to file the Beneficial Ownership Information Report
Beneficial Ownership Information Reporting FAQ
Small Business Compliance Guide (PDF)
Uncertainty Surrounds CTA — for Accountants and Small Biz (accountingToday)
