Adams and Reese Partner and Construction Team Co-Leader Trent Cotney had his article “Construction Law: CTA Requirements” published in Architectural West Magazine.” Cotney discusses the requirements of the Corporate Transparency Act and how some trade associations are urging Congress to delay CTA reporting.
“Starting on January 1, 2024, companies across the United States were required to report information about their owners and other key stakeholders to the Financial Crimes Enforcement Network (FinCEN), a U.S. Treasury division,” Cotney writes. “The intent of this reporting requirement is to hinder money laundering, terrorism, and other illicit activity, but the reality is a regulatory nightmare, both for FinCEN and the businesses affected.”
Cotney said that impacted businesses, the vast majority being small businesses such as LLCs, will be required to submit the names and personal information of their “beneficial owners.” This term refers to owners, senior management, board members, attorneys, and others with significant control or interest in the companies. The businesses also have to monitor and update the data.
In November 2023, more than 70 trade associations representing millions of U.S. businesses sent a letter to Congress urging lawmakers to postpone the reporting requirements for one year.
“They argued that FinCEN is not prepared to manage the influx of information that the reporting will involve and FinCEN has not adequately educated the public, so many companies are not aware of their obligations,” writes Cotney. “It is estimated that FinCEN will receive more than 32 million reports starting in 2024, with another five to six million filings in each year that follows.”
Read the full article in Architectural West Magazine