The Corporate Transparency Act (CTA) became federal law in the United States on January 1, 2024. This legislation requires certain companies to provide detailed information to the United States Department of the Treasury about individuals who hold ultimate control over the entity, whether directly or indirectly.
The CTA has a clear purpose: to combat practices such as money laundering, terrorism financing, and other financial crimes. Through the obligation to report the real beneficiaries, the law aims to hinder the use of companies as shields to conceal illicit activities.
This regulation has a broad scope, applying to various forms of businesses, from corporations to limited liability companies (LLCs), limited partnerships, and business trusts, among other similar entities. However, it is important to note that there are exceptions, such as publicly traded companies, those subject to other federal property disclosure laws, and those with fewer than 20 employees and annual gross revenues of less than $5 million.
Companies under the jurisdiction of the CTA must provide the following information about their real beneficiaries:
- Full name.
- Date of birth.
- Current address.
- Tax identification number (if applicable).
Additionally, companies are also obligated to provide information about the applicants for the company, the individuals who submit the application for the entity’s creation.
It is important to emphasize that companies that do not comply with the information requirements established by the CTA may be subject to penalties, including civil fines of up to $500,000 and imprisonment sentences that could extend up to two years.
The implementation of the Corporate Transparency Act represents a significant step in the fight against financial crime in the United States. By requiring companies to disclose their real owners, the law aims to thwart those criminals attempting to use companies as veils to conceal their illicit activities.
It’s important to note that tax laws are subject to changes and revisions, and the information regarding this law may have evolved since its period of effectiveness. Therefore, it is essential to consult with an updated tax advisor in Puerto Rico for accurate guidance on how this law may affect your tax situation.
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Disclaimer: The information provided on this website is for informational purposes only and is not legal or tax advice. You should consult with a qualified attorney or tax advisor to discuss your specific situation.