CTA Law

The National Small Business Association (NSBA) on November 9, 2023, published a survey it conducted of small businesses regarding the Corporate Transparency Act.  The most startling statement in the survey is “The average small-business owner is looking at compliance costs for CTA of nearly $8,000 in the first year alone.”

Here are some of the interesting findings discussed in the survey:

• 47% of small business owners are unaware of the CTA.
• 48% said their business [. . .]
  

The Corporate Transparency Act became a law on January 1, 2021.  The CTA provided that it would become effective January 1, 2022.  This law requires almost all existing companies formed in the United States since the U.S. became a country to file a report with the Financial Crimes Enforcement Network (FinCEN) that discloses information about each of the company’s “beneficial” owners.  A beneficial owner is a person, entity or trust that own 25% or more of the company or who has substantial control of the company.

These FinCEN [. . .]

During a Senate Financial Services and General Government Appropriations Subcommittee U.S. Senator Cindy Hyde-Smith questioned Deputy Treasury Secretary Wally Adeyemo about the Biden administration’s actions that added new regulatory burdens on small businesses.  Senator Hyde-Smith also told Adeyemo that the Corporate Transparency Act imposes financial and compliance burdens on small businesses.  The CTA created a Beneficial Ownership Database that is intended to help fight financial crimes by bringing transparency with respect to who forms, owns, and controls American businesses and foreign entities that do business in [. . .]

On May 10, 2022, U.S. Senators Marco Rubio (R-FL) and Elizabeth Warren (D-MA) sent a letter to U.S. Treasury Secretary Janet Yellen and Acting Director of the Financial Crimes Enforcement Network (FinCEN) Himamauli Das regarding the delayed implementation of Rubio’s Corporate Transparency Act (CTA), which was signed into law in 2020 (P.L. 116-283).  Senators Chuck Grassley (R-IA), Sheldon Whitehouse (D-RI), Ron Wyden (D-OR), Bob Menendez (D-NJ), and Bill Cassidy (R-LA) also signed the letter.

“The Treasury Department has yet to finalize the implementation of the CTA—or even [. . .]

On May 5, 2022, U.S. Senators Marco Rubio (R-FL), Sheldon Whitehouse (D-RI), Ron Wyden (D-OR), and Chuck Grassley (R-IA) sent a bipartisan comment to the Financial Crimes Enforcement Network (FinCEN) encouraging the efficient, effective implementation of a beneficial ownership reporting system, as required by the Corporate Transparency Act (CTA).

The comment is below.

To Whom It May Concern,

We write in response to the Financial Crimes Enforcement Network’s (FinCEN) advance notice of proposed rulemaking regarding to the implementation of the Corporate Transparency Act (CTA), enacted into law as part of [. . .]

FinCEN Director Him Das testified on April 28, 2022, before the House Committee on Financial Services.  Very little of his written statement dealt with the Corporate Transparency Act.  He closed by saying:

“In closing, timely and effective implementation of the AML Act, which includes the CTA, is a top priority. . . . limited resources have presented significant challenges to meeting the implementation requirements of our expanded mandate under the AML Act, including the CTA’s beneficial ownership requirements. As you are aware, we are missing deadlines, [. . .]

A February 9, 2022, article in the Wall St. Journal discusses the Corporate Transparency Act (CTA).  Here are some statements from the article:

“FinCEN in December released what it said were the first of three sets of proposed rules governing how the database will work. . . . FinCEN on Tuesday said it received more than 230 comments in response to its proposed rules. . . . stakeholders, however, including organizations representing financial institutions and small businesses, expressed [. . .]