Effective Jan. 1, 2024, millions of businesses across the United States will be subject to new reporting requirements under the Corporate Transparency Act (CTA). With stringent penalties for violations, the CTA requires certain businesses to report to the Financial Crimes Enforcement Network of the U.S. Department of Treasury (FinCEN) certain information for persons with "substantial" control over the business or at least 25% ownership interest in the business.

The CTA was enacted as part of the Anti-Money Laundering Act of 2020 in the National Defense Authorization Act for Fiscal Year 2021 (NDAA) to end the United States' position as a harbor for "shell" companies used to facilitate illicit activity and the commission of crimes, protect interstate and foreign commerce, and bring the United States into compliance with international anti-money laundering and countering the financing of terrorism standards. In line with this intent, the CTA requires certain businesses, or "reporting companies," to report direct and indirect, human, beneficial ownership, control, and service provider information to FinCEN in order to streamline criminal investigations.