Corporate Transparency Act Impacting Construction Industry: Covered Entities, Reporting Requirements, Exemptions

Description

The CTA, effective as of Jan. 1, 2024, requires certain U.S. and foreign entities defined as "reporting companies" to report certain identifying information about themselves, their beneficial owners, and company applicants to FinCEN (the U.S. Dept. of the Treasury's Financial Crimes Enforcement Network) within a certain prescribed time period.

These first-ever federal and new reporting rules will affect millions of reporting companies and will likely impose a heavy burden on construction companies, especially smaller businesses, who do not meet one of the exemptions and must comply with the reporting requirements. Failure to comply with the new reporting requirements will result in serious civil and criminal penalties.

Therefore, it is imperative that counsel and their clients who are potentially affected by the CTA determine whether they qualify as a reporting company or are otherwise exempt. If an entity qualifies as a reporting company, counsel must understand the information that is required to be reported and when and be able to walk their clients through the necessary due diligence process that should be undertaken to file a true, correct, and complete report. In addition to the CTA, counsel should be aware of any applicable state-level reporting requirements.

Listen as our expert panel guides counsel through the CTA and discusses its impact on construction entities. The panel will also address state laws that may have similar reporting requirements and offer best practices for CTA compliance.