CORPORATE TRANSPARENCY ACT: The Buzz Continues

The buzz about the Corporate Transparency Act (“CTA”) continues. As you may recall, this federal statute requires businesses to register with the Treasury Department’s Financial Crimes Enforcement Network. The Corporate Transparency Act requires that domestic reporting companies, meaning a corporate entity, which is created by the filing of a document with the Secretary of State, submit information to the federal government regarding the beneficial owner of the corporate entity (i.e., the person who has substantial control or at least 25% ownership interest in the corporate entity). For community associations, members of the board of directors are beneficial owners, along with those owners who hold more than 25% of the percentage of ownership in the association. This means that the beneficial owner must provide (1) their full legal name; (2) date of birth; (3) current address; and (4) a unique identifying number from an acceptable identification document, such as a current driver’s license, state-issued ID, or passport (a copy of the document must also be provided) to the Treasury Department’s Financial Crimes Enforcement Network. This information must be provided by January 1, 2025.

However, there are steps being taken which may not require compliance by January 1, 2025. S.3625 is a Senate companion bill to H.R. 5119 that seeks to delay the reporting requirements by one year. This bill passed the House, but we wait to see what happens with the Senate. Because the Senate was not moving the bill, the House of Representatives introduced H.R. 8147, which seeks to repeal the CTA.

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