NH Legal Perspective: The Corporate Transparency Act is here: Is your business ready?

This article, written by attorneys Kaitlin Murphy and Andrew Newcombe, was originally published by the NH Union Leader and can be found here.

The Corporate Transparency Act (CTA) took effect on Jan. 1. Under this law, the majority of private companies formed or registered to do business in the U.S. are now required to report detailed information about the individuals with substantial ownership stakes or control over them to the Financial Crimes Enforcement Network (FinCEN). Willful noncompliance with the CTA can result in severe penalties — up to $10,000 fines and two years in prison — but many companies still do not know about the CTA or understand whether and how it applies to them.


Few jurisdictions in the U.S. currently require legal entities such as limited liability companies or corporations to disclose information about the individuals who own or control them. Consequently, illicit actors (such as terrorists and criminals) have been able to use private companies to shield their identities while conducting economic activities in the U.S. The CTA is intended to eliminate corporate anonymity in the U.S. and, thereby, to make it more difficult to use corporate structures to perpetrate fraud, money laundering, tax evasion, corruption and other unlawful conduct.

Reporting companies

A “reporting company” is any legal entity either created or registered to do business in a U.S. jurisdiction by the filing of a document with a secretary of state or similar office under state or tribal law. In most states, limited liability companies, corporations and limited partnerships will be reporting companies, whereas common law partnerships and most trusts will not. However, state laws vary regarding which entities file formation or registration documents with the secretary of state. Additionally, there are 23 exemptions under the CTA, including for “large operating companies” that, among other things, meet certain threshold requirements regarding their number of employees and annual gross receipts within the U.S. Certain tax-exempt entities, charitable trusts, and entities that are controlled or wholly owned by certain other exempt entities are also exempt under the CTA.

BOI reports

There are three categories of information that non-exempt reporting companies may need to submit to FinCEN: company information, beneficial owner information and company applicant information. The heart of the report is beneficial owner information.

A beneficial owner is any individual who, either directly or indirectly, exercises substantial control over a reporting company or owns or controls at least 25% of a reporting company’s ownership interests. If a reporting company has an owner or controlling person that is a legal entity, the company must look through the ownership of the legal entity to the individuals who own or control that entity. For each beneficial owner, companies must report:

  • full name.
  • date of birth.
  • residential address.
  • valid identification number from one of several approved forms of government-issued IDs.
  • an image of that government ID.

For company information, reporting companies are required to disclose legal name, any trade names, taxpayer ID, jurisdiction of U.S. formation or registration, and physical street address of U.S. principal place of business. Finally, companies formed or registered on or after Jan. 1, 2024, must also report company applicant information. There may be up to two company applicants for a reporting company: the individual who directly filed the document that created or registered the company, and the individual primarily responsible for directing or controlling the formation or registration, which may or may not be the same person. The categories of reported data for company applicants are the same as for beneficial owners, except that company applicants may provide a business address instead of a residential address if they are a professional working in entity formation (such as attorneys or corporate formation services).

Deadlines and ongoing obligations

Companies that were already formed or registered before Jan. 1, 2024, have until Dec. 31, 2024, to submit their initial reports to FinCEN. For all entities formed or registered on or after Jan. 1, 2024, the deadline to submit an initial report is currently 90 days from the date on which the formation or registration documents are filed with the secretary of state or similar office, but that deadline is set to drop to just 30 days beginning on Jan. 1, 2025.

After a reporting company submits its initial report, there are no annual reporting requirements. However, there is an ongoing obligation to submit supplemental reports anytime any previously submitted information changes. Supplemental reports are due within 30 days of the date of a change.

Next steps

This article only provides a very high-level overview of the CTA, which we hope will help to raise awareness about this new federal reporting requirement. However, there are many more nuances to CTA compliance, especially for companies with complex ownership structures. If your business has not yet started planning for CTA compliance — especially if you formed or registered an entity this year and are now approaching the 90-day deadline for filing your initial report — we encourage you to seek legal advice about this new requirement today.