The Corporate Transparency Act Explained

Corporate Transparency Act
Updated August 16, 2023
Travis Crabtree
Written byTravis Crabtree
Zachary Ace Aiuppa
Edited byZachary Ace Aiuppa
Share this guide

Key Takeaways

  • The Corporate Transparency Act requires companies to file Beneficial Ownership Information Reports with FinCEN.

  • The CTA is aimed at combating financial crimes through increased corporate transparency.

  •  Non-compliance with the CTA can result in hefty civil and criminal penalties enforced by FinCEN.

What is the Corporate Transparency Act?

The Corporate Transparency Act (CTA) is a law passed in 2021. The CTA is designed to increase transparency in corporate ownership by requiring certain businesses to file reports with the Financial Crimes Enforcement Network (FinCEN) identifying their owners. The goal is to cut back on money laundering, fraud, and other bad conduct by those trying to hide behind corporate shells and games.[1] 

The CTA requires certain businesses to file Beneficial Ownership Information (BOI) reports. These businesses are known as “Reporting Companies.” 

Who must file under the CTA? 

Corporations, LLCs, or other businesses formed through a filing process with state or tribal Secretaries of State or equivalent offices must file a BOI. This includes domestic reporting companies formed in the U.S. and foreign reporting companies created abroad but registered to operate in the U.S. 

According to FinCEN, 32.6 million companies will have to report in the first year, and they estimate another 5 million each additional year after that.[2]

CTA exemptions

There are a few exemptions to the filing requirements of the CTA. These exemptions include: 

Large businesses: Businesses with more than $5 million in gross receipts in the previous year and at least 20 employees. 

Reporting Companies already subject to anti-money laundering laws, such as businesses already subject to the Bank Secrecy Act, involved in insurance, the SEC, or other entities that must report ownership information to federal agencies. 

What information must be filed in the BOI?

The BOI Report must include the following information for each beneficial owner of the Reporting Company: 

  • Full legal name 

  • Date of birth 

  • Current residential address 

  • Unique identifying number from a non-expired identification document 

When does the BOI report need to be filed by? 

The BOI Report must be filed within 30 days of the formation or registration of the Reporting Company. If the Reporting Company was formed or registered before January 1, 2024, the BOI Report must be filed by January 1, 2025. 

Where do I file the BOI report?

The BOI Report must be filed electronically with FinCEN.[3] 

Is information filed with FinCEN confidential? 

Information filed with FinCEN under the CTA is confidential and cannot be disclosed to the public. However, law enforcement agencies can access this information to investigate potential financial crimes. 

What happens if a business doesn’t comply with the CTA? 

FinCEN is a federal agency with the authority to impose civil and criminal penalties on businesses that fail to comply with the law. These fines can be as much as $500 per day, a criminal penalty of imprisonment for up to two years, and a $10,000 fine.

The Corporate Transparency Act - Swyft Filings

The Corporate Transparency Act is still a relatively new law, and it’s still too early to say what additional hurdles it will present to entrepreneurs. While the law is a significant step towards increasing transparency in corporate ownership, and it is likely to have a positive impact on the fight against financial crimes, there is no doubt it adds another regulatory requirement on the entrepreneur’s plate. 

As entrepreneurs navigate the ever-changing landscape of regulations, understanding and adhering to new compliance requirements can become a complex task. The additional administrative load might seem overwhelming, especially when you’re already managing the many aspects of running a business. That’s where support systems like Swyft Filings come into play.

We’re dedicated to helping business owners stay compliant without the added stress. Check our site as we roll out our Corporate Transparency Act services, designed to let you focus on what you do best — growing your business. Leave the paperwork to us.

Bibliography

1. Financial Crimes Enforcement Network. “FinCEN.gov/.” Accessed August 16, 2023. 

2. Federal Register. “Beneficial Ownership Information Reporting Requirements.” Accessed August 16, 2023.

3. Financial Crimes Enforcement Network. “Filing Information.” Accessed August 16, 2023.

Originally published on August 16, 2023, and last edited on August 16, 2023.

Frequently Asked Questions

Looking for answers? You came to the right place. To learn more about our company mission and culture, click the link below.

Life at Swyft
How much does it cost to form a corporation or LLC?

You can form a corporation or LLC with our help for as little as $0, plus state filing fees for incorporation. Filing fees vary depending on the state you incorporate in. For more information on specific states, check out our state guides on the Swyft Resource Center. You can also email us with specific questions or contact us at 877-777-0450.

What payment methods do you accept?

Swyft Filings accepts payment through Visa, MasterCard, American Express, PayPal, checks, and money orders. You can send any questions about payment to our email address or contact us at 877-777-0450.

Will I have to pay additional fees to Swyft Filings after completing my order?

It depends on what you ordered. If all you did was file your corporation or LLC, the price you paid when ordering is all you pay. You will have no further fees after that.

However, if you signed up for the Swyft Filings Registered Agent Service, you will be charged its initial fee three days after you place your order. From then on, you will be charged according to the terms of your subscription until you change your registered agent with the state or dissolve your company. If you change your agent or dissolve your company on your own, let us know so we can discontinue billing.

Other potential subscription-based options include SnapMailbox, 360 Legal Forms, and ComplianceGuard. If you opt for SnapMailbox or 360 Legal Forms, you will be charged a monthly fee after their respective 30-day free trials end. ComplianceGuard has an annual fee after a 14-day free trial. All three of these services are completely optional.

When will my order be processed?

Our team processes all Standard orders on a first come, first served basis. If you opt for Express or Same-Day Processing, we prioritize your order and send it to the front of the line. However, no matter how fast we get it out the door, you’ll still have to wait for your state to address your filing.

Swyft Blog

Everything you need to know about starting your business.

Each and every one of our customers is assigned a personal Business Specialist. You have their direct phone number and email. Have questions? Just call your personal Business Specialist. No need to wait in a pool of phone calls.

Woman in room with flowers in vases.
Preparing to Launch

5 LegalZoom Alternatives for Entrepreneurs

If you’ve considered forming a Limited Liability Company (LLC), corporation, or nonprofit, you’ve probably heard of LegalZoom. This service has helped entrepreneurs with business formation since 2001.
Coffee Shop Owner on Computer
Preparing to Launch

Northwest Registered Agent vs. LegalZoom

Our Northwest Registered Agent vs. LegalZoom comparison reviews each service’s formation time, customer service, and offerings so you make an informed choice.
Nonprofit Spotlight: Bailey's Bookworms' Mission of Literacy
Managing Your Business

Nonprofit Spotlight: Bailey's Bookworms' Mission of Literacy

Swyft Filings is a business formation service that automates the filing process for entrepreneurs, making it easier to get their LLC, C corp, S corp, or nonprofit off the ground. Since 2015, we've helped over 300,000 businesses incorporate.
Blog Card Image
Managing Your Business

What's an Apostille?

Swyft Filings is a business formation service that automates the filing process for entrepreneurs, making it easier to get their LLC, C corp, S corp, or nonprofit off the ground. Since 2015, we've helped over 300,000 businesses incorporate.
zenbusiness vs legalzoom - Swyft Filings

ZenBusiness vs. LegalZoom: Comparing LLC Formation Services

Our ZenBusiness vs. LegalZoom comparison reviews each service’s formation time, customer service, and other features so you make an informed choice.
Setting Up Business Credit
Managing Your Business

How to Get an EIN to Open a Business Bank Account

In most cases, you need an employer identification number to open a business bank account. Follow these steps to get an EIN for your business banking needs

Do what you love. We'll handle the paperwork.

Trusted by over 250,000 businesses since 2015. Start your business with confidence. Affordable. Fast. Simple.

Incorporate now
Dummy Switchback Image