Corporate Transparency Act (CTA)

The Corporate Transparency Act, (CTA), was passed by the United States Congress in 2021 to better enforce existing laws surrounding tax fraud, money laundering and other financial crimes. Previously, the ownership information of anonymous companies was difficult for law enforcement agencies to obtain when researching crimes.

The sections below are kept as history. They describe the reporting rule as FinCEN wrote it in 2022 and as it began to apply on January 1, 2024, before FinCEN's March 2025 interim final rule and its August 2026 final rule. For forming an LLC, benefits, articles of organization, operating agreement, EIN, registered agent, business search, single-member LLC, holding company, reinstate, or dissolution, see our Form a Wyoming LLC pages or contact us.

Under FinCEN's final rule, which took effect on August 14, 2026, companies created in the U.S. and their owners are exempt from federal beneficial ownership reporting, so these companies are no longer required to send owner information to FinCEN under the Corporate Transparency Act. FinCEN has said it will delete the information that U.S. persons reported earlier, and we are not aware of a published completion date. What a state publishes about an LLC's owners still depends on the state.

General information about FinCEN's federal rule, not legal advice about any particular company. Last checked October 19, 2026 against FinCEN's beneficial ownership page and the Federal Register (91 FR 52508). Rules in this area have changed several times; fincen.gov/boi shows current status.

Under the 2024 rule, the first question was which companies were required, and which were not required, to report their information. The rule had 23 exceptions for specific types of entities. Those entities are listed below and include banks, public companies, utilities, etc.

Under the 2024 rule, entities meeting these criteria were generally exempt:

1. Large Operating Entities:
   1. More than 20 full-time employees; or
   2. Lease or owned physical office (excluding registered agent address); or
   3. Income tax returns show greater than $5,000,000 in gross receipts from US sources.
2. Regulated Entities (list below)
3. Subsidiaries of Exempt Entities
4. Subsidiaries of Exempt Entities
   1. Corporations and LLCs owned or controlled by an exempt entity are themselves exempt.

The following 23 entity types were exempt under the 2024 rule:

1. Securities reporting issuer
2. Governmental authority
3. Bank
4. Credit union
5. Depository institution holding company
6. Money services business
7. Broker or dealer in securities
8. Securities exchange or clearing agency
9. Other Exchange Act registered entity
10. Investment company or investment adviser
11. Venture capital fund adviser
12. Insurance company
13. State-licensed insurance producer
14. Commodity Exchange Act registered entity
15. Accounting firm
16. Public utility
17. Financial market utility
18. Pooled investment vehicle
19. Tax-exempt entity
20. Entity assisting a tax-exempt entity
21. Large operating company
22. Subsidiary of certain exempt entities
23. Inactive entity

Were there any exemptions from the reporting requirements?

• Under the 2024 rule, there were several exemptions to the reporting requirements. Those exemptions included a beneficial owner who was a minor (though the minor’s parent’s information would have been reported), an individual acting as a nominee, an employee of a reporting company (this does not include an officer), an individual with a future interest such as an inheritance, a creditor of a reporting company, or a third party company applicant.
• Financial Crimes Enforcement Network U.S. Department of the Treasury, Small Entity Compliance Guide, Sept. 2023 -Version 1, page 29, https://www.fincen.gov/boi/small-entity-compliance-guide 31 C.F.R. § 1010.380(d)(3)

This term has become widely known since FATCA compliance spread worldwide. The ultimate beneficial owner is a natural person who benefits from an entity. The rules were put in place to avoid people using shell companies and trusts to mask the “real” owners of a company.

Under the 2024 rule, every company had to “bottom out” in a natural person for reporting purposes. That is to say a yacht or bank account cannot be enjoyed by a corporation or business entity. There is a human behind every transaction. This person, or persons, were to be reported as part of the beneficial ownership information. This was previously only given to banks for Know Your Customer (KYC) and Anti-Money Laundering (AML) purposes.

Under the 2024 rule, companies were required to disclose all direct or indirect owners of at least 25% of the shares. In addition, such individuals who had substantial control over the company were to be disclosed. This included all officers, the board of directors, and the authorized signatories of the parent company. Names, dates of birth, place of residence and passport information (including copy of ID) were requested.

FinCEN’s definition of Beneficial Ownership Information (BOI) was somewhat different:

• FinCEN calls BOTH individuals who are owners of a company and individuals who have substantial control of the company, beneficial owners.
• Owners of the company who owned 25% or more of the company were to be included on the company report.
• In addition, anyone who exercised substantial control over the company was to be reported. 31 C.F.R. § 1010.380

What is substantial control?

• Under the 2024 rule, reporting companies were required to report all persons who exercised substantial control if the individual met any of the following criteria:
  • (1) Serving as a senior officer of the reporting company
  • (2) Has authority over the appointment or removal of any senior officer or a majority of the board of directors (or similar body) [A senior officer is any individual holding the position or exercising the authority of a president, chief financial officer (CFO), general counsel (GC), chief executive officer (CEO), chief operating officer (COO), or any other officer, regardless of official title, who performs a similar function as these officers.]
  • (3) Directs, determines, or has substantial influence over important decisions made by the reporting company
  • (4) the individual has any other form of substantial control over the reporting company
  • 31 C.F.R. § 1010.380 Financial Crimes Enforcement Network U.S. Department of the Treasury, Small Entity Compliance Guide, Sept. 2023 -Version 1, page 17

What is ownership interest?

• An ownership interest for purposes of determining beneficial ownership under the CTA is defined broadly and takes into account a variety of arrangements and ownership interests. In addition to stock and other equity interests, capital interest, and profits interests, put, call, and straddles may also be taken into account, as well as debt instruments with equity like features, in determining whether the 25% threshold is met. For these purposes, the total ownership interests that an individual owns or controls, directly or indirectly, is calculated as a percentage of the total outstanding ownership interests of the Reporting Company, and assumes all options are exercised.31 C.F.R. § 1010.380(d)(2)(iii).
• For Reporting Companies that issue capital or profit interests, an individual’s ownership interests are the capital and profit interests in the entity, calculated as a percentage of the total outstanding capital and profit interests in such entity. For Reporting Companies that issue shares of stock, the threshold is measured as a percentage of the greater of either the total voting power of all ownership interests entitled to vote or the total outstanding value of all classes of ownership interests. However, if the percentage of an ownership interest cannot be determined with “reasonable certainty” using this method, any individual owning or controlling 25% of any class or type of ownership interest of a Reporting Company will be deemed to own or control 25% of all ownership interests in the Reporting Company.31 C.F.R. § 1010.380(d)(2)(iii)(D).

Who is not a beneficial owner?

• Minors, though the parent or guardian will qualify
• Agent, Custodian, Nominee or Intermediary for another person
• An employee who does not benefit from profits or control the company
• Someone who only has an interests via inheritance
• A creditor

The Financial Crimes Enforcement Network is part of the US Department of Treasury. Its purpose is to aggregate and analyze transactional data to fight financial crimes. Historically, these efforts have been hampered by anonymous companies, thus the effort to “pull back the curtain” on such entities.

Reporting Companies and Foreign Entities

Under FinCEN's rule, what matters is where the entity was created, not where its owners live. An LLC or corporation created in the U.S. is exempt from federal BOI reporting, and so are its owners, even if the owners live outside the U.S. An entity formed under the law of another country (not another U.S. state) and registered to do business in a U.S. state or tribal jurisdiction is a reporting company unless another exemption applies. Its initial report is due within 30 days after it receives notice that its state registration is effective, and updates are due within 30 days after a change. It reports only non-U.S. persons who are beneficial owners or company applicants.

FinCEN's BOI page (fincen.gov/boi) links to FinCEN's filing system and its exemption checker. Whether a particular entity is a reporting company, or fits another exemption, depends on its own facts and is a question for a licensed attorney or other qualified adviser.

General information about FinCEN's federal rule, not legal advice about any particular company. Last checked October 19, 2026 against FinCEN's beneficial ownership page and the Federal Register (91 FR 52508). Rules in this area have changed several times; fincen.gov/boi shows current status.

What the 2024 Rule Asked Reporting Companies to Report

For every individual who was a beneficial owner or control person of the company, the following information was to be provided:

1. The full legal name of the individual
2. The date of birth of the individual
3. A complete current residential street address
4. The unique number from an identity document
5. A photo of the identity document showing the unique number. Qualifying identity 31 C.F.R. § 1010.380

What is a FinCEN Identifier?

• A “FinCEN identifier” is a unique identifying number that FinCEN will issue to an individual or a reporting company upon request after the individual or reporting company provides certain information to FinCEN. An individual or reporting company is not required to obtain a FinCEN identifier. An individual or reporting company may only receive one FinCEN identifier. FinCEN identifiers can be included in reports to FinCEN by the reporting company in lieu of providing the underlying information for that particular individual.

Who receives the information?

Under the 2024 rule, reports went to the Financial Crimes Enforcement Network ("FinCEN") at the U.S. Treasury. Access was also provided to law enforcement agencies, financial institutions, and other authorized persons, including foreign tax authorities.

When did the 2024 rule take effect?

January 1, 2024

In September 2022, the Financial Crimes Enforcement Network (FinCEN) issued a final rule implementing the bipartisan Corporate Transparency Act’s (CTA) beneficial ownership information (BOI) reporting provisions (87 Fed. Reg. 59498). The rule was intended to enhance the ability of FinCEN and other agencies to protect U.S. national security and the U.S. financial system from illicit use and provide essential information to national security, intelligence, and law enforcement agencies; state, local, and Tribal officials; and financial institutions to help prevent drug traffickers, fraudsters, corrupt actors such as oligarchs, and proliferators from laundering or hiding money and other assets in the United States.

The 2022 rule described who had to file a BOI report, what information was to be reported, and when a report was due. It required reporting companies to file reports with FinCEN that identified two categories of individuals: (1) the beneficial owners and/or persons with substantial control of the entity; and (2) the company applicants of the entity.

The Anti-Money Laundering Act of 2020 (AMLA) established the Corporate Transparency Act (CTA). As enacted and as the 2022 rule implemented it, certain U.S. and foreign entities defined as reporting companies were to report beneficial owners and company applicants to FinCEN (the Department of the Treasury’s Financial Crimes Enforcement Network), beginning January 1, 2024. FinCEN's August 2026 final rule changed which entities are reporting companies; see the status box at the top of this page.

Anonymity is only part of what an LLC structure offers. Limited liability is arguably the most important piece of the structure.