Deadline approaches for business owners to comply with Corporate Transparency Act
The Corporate Transparency Act requires millions of small business entities to disclose information about their beneficial owners to the federal government.
By Drew Viguet
National Agricultural Law Center
U of A System Division of Agriculture
Oct. 23, 2024
Fast facts:
- Deadline to file under CTA is Dec. 31
- Reporting is done entirely online
- National Ag Law Center has CTA factsheet available
(703 words)
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FAYETTEVILLE, Ark. — The deadline is fast approaching for many businesses across the country to file with the federal government.
The Corporate Transparency Act, or CTA, requires millions of small business entities to disclose details of their beneficial owners through a Beneficial Ownership Information, or BOI, report. The report is filed through the U.S. Department of Treasury’s Financial Crimes Enforcement Network, or FinCEN.
The purpose of the CTA is to reduce financial crimes, such as money laundering, by taking stock of ownership information of businesses that operate within or have access to the U.S. market. The CTA is not new, having been enacted in 2021 as part of the National Defense Authorization Act. Its reporting requirements went into effect on Jan. 1, 2024.
Reporting companies must include information identifying “beneficial owners” of the business, including name, date of birth, address, and a copy of some specific forms of identification, such as a driver’s license or a passport.
In addition, companies created or registered after Jan. 1, 2024, must also include personal identifying information about the individuals responsible for the filing. Reporting is done entirely online.
Elizabeth Rumley, senior staff attorney at the National Agricultural Law Center, or NALC, said the CTA is a significant topic not just for those in agriculture, but also for all business owners.
“The CTA is an attempt at cataloguing a national corporate database that tracks U.S. business ownership,” Rumley said. “It’s one of the biggest topics that we have discussed with stakeholders this year, and its reach goes far beyond agriculture. The CTA impacts millions of the nation’s small business entities, and there are just over two months left to report.”
Rumley noted that there are potential significant consequences for failing to comply, including fines or imprisonment.
“There are certain entities that are exempt from filing, but the default assumption of small business owners should be to file, or confirm that they are exempted, by Dec. 31,” she said.
Getting the word out
As the nation’s leading source of agricultural and food law research and information, the NALC has made it a key part of its mission in 2024 to spread word of the CTA ahead of the December filing deadline. Part of that approach has been the creation of a CTA factsheet, which is available online on the NALC website. The factsheet was authored by former NALC Research Fellow Caitlin Robb and Rumley.
“Our goal with the factsheet was to condense everything that is known about the CTA — including its history, what it does, who it impacts, how to file, situation examples, and more — into a resource to refer to,” Rumley said. “Through our speaking events and engagements with stakeholders in 2024, we have realized that many have limited knowledge of the CTA or are unaware of it entirely.”
Earlier this year, the NALC also hosted a webinar covering details of the CTA. Kristine Tidgren, director of the Center for Agricultural Law and Taxation at Iowa State University, or CALT, presented the webinar, which is available to view online. Additionally, CALT has a webpage dedicated to information on the CTA.
“We understand there are many questions when it comes to the CTA,” Rumley said. “These resources should answer a lot of questions and point people in the right direction.”
Legal challenges
Numerous legal challenges regarding the CTA are pending. Recently, an Oregon federal court declined to issue a preliminary injunction in a case where the plaintiffs challenged the constitutionality of the CTA.
In March, a federal district court in Alabama ruled that the CTA is unconstitutional, granting plaintiffs in the case summary judgement as a matter of law. The ruling suspended enforcement of the CTA in regard to some specific parties.
The 11th Circuit Court of Appeals heard oral arguments in an appeal of that decision on Sept. 27. That process will likely not alter the deadline for businesses to file.
With the deadline to file just around the corner, those who still need to file should plan accordingly, Rumley said.
“The end of the year is approaching fast,” Rumley said. “It’s important to learn more about whether the filing requirements apply to your business, and then make a plan for meeting those obligations to avoid potential consequences.”
For information about the National Agricultural Law Center, visit nationalaglawcenter.org. The National Agricultural Law Center is also on X, Facebook and LinkedIn.
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About the National Agricultural Law Center
Created by Congress in 1987, the National Agricultural Law Center serves as the nation’s
leading source of agricultural and food law research and information. The NALC works
with producers, agribusinesses, state and federal policymakers, lenders, Congressional
staffers, attorneys, land grant universities, students, and many others to provide
objective, nonpartisan agricultural and food law research and information to the nation’s
agricultural community.
The NALC is a unit of the University of Arkansas System Division of Agriculture and
works in close partnership with the USDA Agricultural Research Service, National Agricultural
Library.
About the Division of Agriculture
The University of Arkansas System Division of Agriculture’s mission is to strengthen
agriculture, communities, and families by connecting trusted research to the adoption
of best practices. The Division of Agriculture conducts research and extension work
within the nation’s historic land grant education system through the Agricultural
Experiment Station and the Cooperative Extension Service.
The Division of Agriculture is one of 20 entities within the University of Arkansas
System. It has offices in all 75 counties in Arkansas and faculty on five system campuses.
The University of Arkansas System Division of Agriculture is an equal opportunity/equal
access/affirmative action institution. If you require a reasonable accommodation to
participate or need materials in another format, please contact dviguet@uark.edu as
soon as possible. Dial 711 for Arkansas Relay.
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Media contact:
Drew Viguet
Communications & Special Projects Coordinator
National Agricultural Law Center
dviguet@uark.edu