Are You Ready? What to Know About the Corporate Transparency Act

March 07, 2024
  • Private Banking
President of the BBH Delaware Trust Company Beth King covers the essentials of the 2024 Corporate Transparency Act: what it is, who it affects, and how to take action.

The Corporate Transparency Act (CTA), which went into effect on January 1, 2024, is far-reaching and may impact more than 30,000,000 private businesses. Here, we cover the key facts of the CTA and how to navigate it to best prepare you for the year ahead.

What is the CTA?

The CTA requires certain reporting companies to report the personal information of all beneficial owners to the Financial Crimes Enforcement Network (FinCEN). This legislation was enacted under the 2021 National Defense Authorization Act and stems from legislative, policy, and international pressures to increase transparency and enhance efforts to combat money laundering and terrorism.

Put simply, the CTA functions as a comprehensive business ownership reporting regime that requires most private companies to disclose the personal information of who owns and/or controls the company. Under the CTA, reporting companies must provide FinCEN with information about the entities and identify all company applicants and beneficial owners.

A reporting company is an entity created by filing a document with the secretary of state or similar office. The CTA will apply to both domestic and foreign reporting companies.

  • Domestic Reporting Companies are corporations, LLCs, business statutory trusts, or other similar entities created within the U.S.
  • Foreign Reporting Companies are entities formed under a foreign country’s law that are registered to do business within the U.S.
For example, if you own a vacation home that’s held in an LLC, you will have to log onto FinCEN and submit your BOI along with the BOI of anyone else who has substantial ownership or control over the entity.

The company applicant is the individual who directly files the document creating the reporting company, or who is primarily responsible for directing the filing.1

Beneficial owners are defined as any individual who either directly or indirectly:

  1. Owns or controls at least 25% of the ownership interest in a reporting company; or
  2. Exercises substantial control over the reporting company

It’s essential to perform due diligence if you think you or someone you know may qualify as a beneficial owner.

Beneficial Owners and Trusts

While a trust itself is not a reporting company, many people involved in trust structures, including trustees, advisers, settlors and beneficiaries will be considered beneficial owners under certain circumstances.

For example, where a trust owns 25% or more of a reporting company, the following individuals are considered beneficial owners:

  • All trustees, advisers or people with the ability to make investment decisions or to control the disposition of the reporting company
  • A settlor of a revocable trust
  • A settlor of an irrevocable trust where the settlor has the right to substitute assets (a power that is commonly given to settlors to make a trust a “grantor trust”)
  • A beneficiary who is the only person with the right to receive distributions of income and principal
  • A beneficiary who has the right to demand or withdraw substantially all of the assets

Moreoever, regardless of the trust’s percentage of ownership, all fiduciaries or people who exercise substantial control over or make important decisions about the reporting company will be considered beneficial owners.

What are the reporting deadlines?

The obligation to report beneficial ownership began on January 1, 2024. The reporting deadlines to submit beneficial ownership information (BOI) to FinCEN differ depending on when the entity was created:

  • Entities created prior to January 1, 2024 have until January 1, 2025. These entities do not need to provide information on company applicants.
  • Entities created on or after January 1, 2024 and before January 1, 2025, have 90 days.
  • Entities created or registered on or after January 1, 2025 have 30 days from actual or public notice the company’s registration is effective.


There are a total of 23 categories of exempt entities, most of which are already subject to thorough federal and state regulation. Exemptions include governmental entities, publicly traded companies, insurance companies, registered investment companies, banks, credit unions, and other financial institutions, tax-exempt organizations (e.g., registered charitable organizations), or a large operating company. The latter is defined as an entity that employs more than 20 full-time workers, has a physical presence in the U.S., and has reported more than $5 million gross receipt sales on the prior year’s tax return.

Taking Action

To ensure preparedness for the CTA, consider the following steps:

  • Inventory your entities: Do you need these entities? Do you anticipate adding and/or needing more entities?
  • If the CTA applies to you, log onto FinCEN and submit all necessary info within the deadlines. The report will require the company’s name, address, and EIN, as well as the name, residential street address, DOB, and photo ID of each beneficial owner (and company applicant for entities created after January 1, 2024).

A full list of exemptions and reporting requirements can be found on For more information on how the CTA might affect you, reach out to your relationship manager.

Contact Us

Up Next
Up Next

Owner to Owner Fall Issue 2023

In this issue of Owner to Owner, we explore strategies for successful communication in a private business, examine factors that come into consideration when debating whether now is time to sell the family business, and review key findings from our inaugural Private Business Owner Survey.

1 Information about the company applicant does not need to be provided for a reporting company in existence prior to Jan. 1, 2024.

Brown Brothers Harriman & Co. (“BBH”) may be used to reference the company as a whole and/or its various subsidiaries generally. This material and any products or services may be issued or provided in multiple jurisdictions by duly authorized and regulated subsidiaries. This material is for general information and reference purposes only and does not constitute legal, tax or investment advice and is not intended as an offer to sell, or a solicitation to buy securities, services or investment products. Any reference to tax matters is not intended to be used, and may not be used, for purposes of avoiding penalties under the U.S. Internal Revenue Code, or other applicable tax regimes, or for promotion, marketing or recommendation to third parties. All information has been obtained from sources believed to be reliable, but accuracy is not guaranteed, and reliance should not be placed on the information presented.  This material may not be reproduced, copied or transmitted, or any of the content disclosed to third parties, without the permission of BBH. All trademarks and service marks included are the property of BBH or their respective owners. © Brown Brothers Harriman & Co. 2023. All rights reserved. PB-06991-2023-12-18

As of June 15, 2022 Internet Explorer 11 is not supported by

Important Information for Non-U.S. Residents

You are required to read the following important information, which, in conjunction with the Terms and Conditions, governs your use of this website. Your use of this website and its contents constitute your acceptance of this information and those Terms and Conditions. If you do not agree with this information and the Terms and Conditions, you should immediately cease use of this website. The contents of this website have not been prepared for the benefit of investors outside of the United States. This website is not intended as a solicitation of the purchase or sale of any security or other financial instrument or any investment management services for any investor who resides in a jurisdiction other than the United States1. As a general matter, Brown Brothers Harriman & Co. and its subsidiaries (“BBH”) is not licensed or registered to solicit prospective investors and offer investment advisory services in jurisdictions outside of the United States. The information on this website is not intended to be distributed to, directed at or used by any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. Persons in respect of whom such prohibitions apply must not access the website.  Under certain circumstances, BBH may provide services to investors located outside of the United States in accordance with applicable law. The conditions under which such services may be provided will be analyzed on a case-by-case basis by BBH. BBH will only accept investors from such jurisdictions or countries where it has made a determination that such an arrangement or relationship is permissible under the laws of that jurisdiction or country. The existence of this website is not intended to be a substitute for the type of analysis described above and is not intended as a solicitation of or recommendation to any prospective investor, including those located outside of the United States. Certain BBH products or services may not be available in certain jurisdictions. By choosing to access this website from any location other than the United States, you accept full responsibility for compliance with all local laws. The website contains content that has been obtained from sources that BBH believes to be reliable as of the date presented; however, BBH cannot guarantee the accuracy of such content, assure its completeness, or warrant that such information will not be changed. The content contained herein is current as of the date of issuance and is subject to change without notice. The website’s content does not constitute investment advice and should not be used as the basis for any investment decision. There is no guarantee that any investment objectives, expectations, targets described in this website or the  performance or profitability of any investment will be achieved. You understand that investing in securities and other financial instruments involves risks that may affect the value of the securities and may result in losses, including the potential loss of the principal invested, and you assume and are able to bear all such risks.  In no event shall BBH or any other affiliated party be liable for any direct, incidental, special, consequential, indirect, lost profits, loss of business or data, or punitive damages arising out of your use of this website. By clicking accept, you confirm that you accept  to the above Important Information along with Terms and Conditions.

1BBH sponsors UCITS Funds registered in Luxembourg, in certain jurisdictions. For information on those funds, please see

captcha image

Type in the word seen on the picture

I am a current investor in another jurisdiction