U.S. Corporate Transparency Act: An In-House Legal Professional's Checklist for Compliance

The U.S. Corporate Transparency Act (CTA) has significant implications for companies across the United States. As an in-house legal professional, it is important to understand the key provisions of the law and take steps to ensure compliance. This checklist provides a guide to help you stay on top of your company's compliance with the CTA.

Understanding the CTA and Its Requirements

The CTA was enacted to combat money laundering, terrorism financing, and other illicit activities that are facilitated by opaque corporate structures. Under the law, certain companies must report their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). The law applies to all U.S. companies that are formed or registered to do business in the United States and that meet certain criteria, including having 20 or fewer employees and more than $5 million in gross receipts or sales.

Compliance CTA Checklist 

  • Determine whether your company is subject to the CTA. Review your company's structure, size, and operations to determine whether it meets the criteria for reporting.
  • Identify your company's ultimate beneficial owners (UBOs). Determine who controls your company and who receives its profits. This information must be reported to FinCEN.
  • Develop and implement policies and procedures for identifying and verifying UBOs. Consider conducting due diligence on all significant investors, shareholders, and other individuals or entities that have a controlling interest in your company.
  • Determine whether any exemptions apply. Some types of entities are exempt from reporting under the CTA, such as publicly traded companies and certain financial institutions.
  • Consider using entity management software. Entity management software can help streamline the process of identifying and tracking UBOs, as well as automating compliance processes.
  • Train employees on the requirements of the CTA. Ensure that all relevant employees are aware of the law and their responsibilities for compliance.
  • Establish a process for ongoing monitoring and reporting of changes in UBO ownership or control. Develop a process for regularly monitoring UBO information and reporting changes to FinCEN as required.
  • Maintain accurate records of all UBO information and compliance activities. Keep detailed records of all UBO information and any compliance activities, including due diligence efforts, to demonstrate compliance with the CTA.

How Athennian Transforms In-House Legal Teams

The U.S. Corporate Transparency Act has significant implications for companies across the United States, and in-house legal professionals play a critical role in ensuring compliance with the law. By understanding the key provisions of the law and taking proactive steps to identify and verify UBOs, develop and implement policies and procedures for compliance, and establish a process for ongoing monitoring and reporting, companies can avoid penalties and reputational damage. Using entity management software can also be a valuable tool for automating compliance processes and reducing the risk of errors. 

Athennian offers a variety of entity management tools, contact us today for a custom consultation with one of our entity management experts. 

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