Legal Alert Regarding The Corporate Transparency Act





One of the unique and often attractive features of a Limited Liability Company can be anonymity.  In most states, formation and registration of an LLC does not require disclosure of the owners or officers.  For various reasons, legitimate and not so legitimate, the owners of a business may not want to broadcast their ownership.  Whether there are genuine concerns regarding privacy and nefarious desires to avoid civil and/or criminal liability, people have availed themselves of this feature.  As such, it can be difficult to identify assets to enforce judgements or confirm net worth in the civil context.  Additionally, it can be difficult to trace financial and criminal wrongdoing to the actual bad actors.

The Federal Government has decided to make things a little easier for itself by creating the Financial Crimes-Enforcement Network or FinCEN.  Try saying that five times fast!  In summary, the U.S. Treasury Department will require the vast majority of LLCs along with C and S corporations to report specific information about the business.  This will include information identifying the ownership of the company.  This is not necessarily a new thing for the shareholders of S and C corporations, but this will be a big change for the members of LLCs.



Authority               United States Department of the Treasury

Corporate Transparency Act (31 USC 5336(b))

Financial Crimes Enforcement Network (FinCEN) Rule


Deadline                  January 1, 2024-January 1, 2025 for entities formed before January 1, 2024

Within 30 days of formation for  entities formed on or after January 1, 2024


Who Must Comply   Any entity that had to file a formation document with a state authority as part of its

formation or registration as a foreign entity doing business in the United States.

                   YES–Corporations (C, S, B[1] and P[2]), Limited Liability Companies, Limited Partnerships, Limited Liability Partnerships[3].

                   NO—Sole Proprietors, General Partnerships.

Exemptions                23 Categories of Exemptions and Exceptions to the rule, including inactive entities, nonprofits, entities that are already subject to federal reporting and regulations, financial institutions, and government entities.

Corporate Information       Legal Name

Trade Names or D/B/A Names


Formation State


Ownership Information       Beneficial Owners. Owners with at least 25% ownership or who have substantial control the company directly or indirectly.

Legal Name


Home Address

Driver’s License, State ID, or Passport Number

Picture of said ID


Duty to Update          Within 30 days of any change or need to correct information.


Failure to Comply     Civil liability $500/day

Criminal penalty up to $10,000 and/or 2 years in jail



Resources              FinCEN

Small Business Guide


Legal Support           Book a Consultation for us to assist you in determining whether your company needs to comply and provide guidance on the process.

Have SLG handle your reporting for you for a flat rate (bulk rate available for multiple entities), this includes any updated reporting for the calendar year (up to 3 updates)



***DISCLAIMER*** This legal update is being provided for informational purposes only.  Its transmission or receipt is not intended to create an attorney-client relationship between the recipient and Smithers Law Group, LLC.  This legal update is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

Copyright © Smithers Law Group, LLC 2024

[1] Beneficial Corporation

[2] Professional Corporation

[3] May depend on the state formation requirements for LPs and LLPs

Updated: Jan 22, 2024

About the author
Roxann Smithers of Smithers Law Group, LLC is a member of XPX Atlanta

your client does not have an attorney on staff or a relationship with the law firm that is providing comprehensive general counsel services.