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  • Corporate Transparency Act

    Compliance Guide

    This Compliance Guide is offered as a tool to assist in determining whether information must be submitted to FinCEN consistent with the Corporate Transparency Act. It is not intended to be a substitute for individual research nor offered as legal or tax advice. You should seek legal representation if you have any questions regarding your obligations under the CTA. No attorney-client relationship is created or infered by the use or submission of this form with Moulton Law Offices, P.S. or any of its attorneys.

    At the end of this form, you will have an opportunity to request assistance with any regulatory compliance you may have. At that time, you will be provided an opportunity to establish an attorney-client relationship.

  • Reporting Company

    Is your company a "Reporting Company" under the CTA? Complete the questions below to help determine whether your company is required to report.

  • Your company may be a domestic reporting company.

  • Your company may be a foreign reporting company.

  • Not a reporting company.

  • Reporting Company Exemptions

    There are a number of exemptions (23) that might apply. Companies that meet an exemption are not required to submit a report under the CTA. Check any exemptions that might apply for additional detailed information on the exemption.

  • Securities reporting issuer. The exemption applies if either of the following two criteria is met:

    1. The entity is an issuer of a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 78l).
    2. The entity is required to file supplementary and periodic information under section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(d)).

  • Governmental authority. The exemption applies if both of the following two criteria is met:

    1. The entity is established under the laws of the United States, an Indian tribe, a State, or a political subdivision of a State, or under an interstate compact between two or more States.
    2. The entity exercises governmental authority on behalf of the United States or any such Indian tribe, State, or political subdivision.

  • Bank. The exemption applies if any of the following criteria is met:

    1. The entity is a “bank” as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).
    2. The entity is a “bank” as defined in section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)).
    3. The entity is a “bank” as defined in section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)).

  • Credit Union. The exemption applies if either of the following criteria is met:

    1. The entity is a “Federal credit union” as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752).
    2. The entity is a “State credit union” as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752).

  • Depository institution holding company. The exemption applies if either of the following criteria is met:

    1. The entity is a “bank holding company” as defined in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841).
    2. The entity is a “savings and loan holding company” as defined in section 10(a) of the Home Owners’ Loan Act (12 U.S.C. 1467a(a)).

  • Money services business. The exemption applies if either of the following criteria is met:

    1. The entity is a money transmitting business registered with FinCEN under 31 U.S.C. 5330.
    2. The entity is a money services business registered with FinCEN under 31 CFR 1022.380.

  • Broker or dealer in securities. The exemption applies if both of the following criteria is met:

    1. The entity is a “broker” or “dealer,” as those terms are defined in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c).
    2. The entity is registered under section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o).

  • Securities exchange or clearing agency. The exemption applies if both of the following criteria is met:

    1. The entity is an “exchange” or “clearing agency,” as those terms are defined in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c).
    2. The entity is registered under sections 6 or 17A of the Securities Exchange Act of 1934 (15 U.S.C. 78f, 78q-1).

  • Other Exchange Act registered entity. The exemption applies if both of the following criteria is met:

    1. The entity is not a securities reporting issuer as defined in Exemption #1, broker or dealer in securities as defined in Exemption #7, or securities exchange or clearing agency as defined in Exemption #8.
    2. The entity is registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).

  • Investment company or investment adviser. The exemption applies if both of the following criteria is met:

    1. The entity is an “investment company” or “investment adviser” defined as either:
      1. An investment company in section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a-3); or
      2. An investment adviser in section 202 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2).
    2. The entity is registered with the Securities and Exchange Commission under either of these authorities:
      1. The Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.); or
      2. The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.).

  • Venture capital fund adviser. The exemption applies if both of the following criteria is met:

    1. The entity is an investment adviser that is described in section 203(l) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(l)).
    2. The entity has filed Item 10, Schedule A, and Schedule B of Part 1A of Form ADV, or any successor thereto, with the Securities and Exchange Commission.

  • Insurance company. The exemption applies if the following criteria is met:

    1. The entity is an “insurance company” as defined in section 2 of the Investment Company Act of 1940 (15 U.S.C. 80a-2).

  • State-licensed insurance producer. The exemption applies if both of the following criteria is met:

    1. The entity is an insurance producer that is authorized by a State and subject to supervision by the insurance commissioner or a similar official or agency of a State.
    2. The entity has an operating presence at a physical office within the United States. The term “operating presence at a physical office within the United States” means that an entity regularly conducts its business at a physical location in the United States that the entity owns or leases and that is physically distinct from the place of business of any other unaffiliated entity.

  • Commodity Exchange Act registered entity. The exemption applies if either of the following criteria is met:

    1. The entity is a “registered entity” as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a).
    2. The entity is one of these entities registered with the Commodity Futures Trading Commission under the Commodity Exchange Act:
      1. “Futures commission merchant” as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a);
      2. “Introducing broker” as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a);
      3. “Swap dealer” as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a);
      4. “Major swap participant” as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a);
      5. “Commodity pool operator” as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a);
      6. “Commodity trading advisor” as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a); or
      7. “Retail foreign exchange dealer” as described in section 2(c)(2)(B) of the Commodity Exchange Act (7 U.S.C. 2(c)(2)(B)).

  • Public accounting firm. The exemption applies if the following criteria is met:

    1. The entity is a public accounting firm registered in accordance with section 102 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7212).

  • Public utility. The exemption applies if both of the following criteria is met:

    1. The entity is a “regulated public utility” as defined in 26 U.S.C. 7701(a)(33)(A).
    2. The entity provides telecommunications services, electrical power, natural gas, or water and sewer services within the United States.

  • Financial market utility. The exemption applies if the following criteria is met:

    1. The entity is a financial market utility designated by the Financial Stability Oversight Council under section 804 of the Payment, Clearing, and Settlement Supervision Act of 2010 (12 U.S.C. 5463).

  • Pooled investment vehicle. The exemption applies if both of the following criteria is met:

    1. The entity is a pooled investment vehicle if either of these statements apply to the entity:
      1. Is an investment company, as defined in section 3(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-3(a); or
      2. Is a company that would be an investment company under that section but for the exclusion provided from that definition by paragraph (1) or (7) of section 3(c) of that Act (15 U.S.C. 80a-3(c)); and is identified by its legal name by the applicable investment adviser in its Form ADV, (or successor form) filed with the Securities and Exchange Commission or will be so identified in the next annual updating amendment to Form ADV required to be filed by the applicable investment adviser pursuant to rule 204-1 under the Investment Advisers Act of 1940 (17 CFR 275.204-1).
    2. The entity is operated or advised by any of these types of exempt entities:
      1. Bank, as defined in Exemption #3;
      2. Credit union, as defined in Exemption #4;
      3. Broker or dealer in securities, as defined in Exemption #7;
      4. Investment company or investment adviser, as defined in Exemption #10; or
      5. Venture capital fund adviser, as defined in Exemption #11.

  • Tax-exempt entity. The exemption applies if any of the following criteria is met:

    1. The entity is an organization that is described in section 501(c) of the Internal Revenue Code of 1986 (Code) (determined without regard to section 508(a) of the Code) and exempt from tax under section 501(a) of the Code.
    2. The entity is an organization that is described in section 501(c) of the Code, and was exempt from tax under section 501(a) of the Code, but lost its tax-exempt status less than 180 days ago.
    3. The entity is a political organization, as defined in section 527(e)(1) of the Code, that is exempt from tax under section 527(a) of the Code.
    4. The entity is a trust described in paragraph (1) or (2) of section 4947(a) of the Code.

  • Entity assisting a tax-exempt entity. The exemption applies if all of the following criteria is met:

    1. The entity operates exclusively to provide financial assistance to, or hold governance rights over, any taxexempt entity described by Exemption #19.
    2. The entity is a United States person as defined in section 7701(a)(30) of the Internal Revenue Code of 1986.
    3. The entity is beneficially owned or controlled exclusively by one or more United States persons that are United States citizens or lawfully admitted for permanent residence. “Lawfully admitted for permanent residence” is defined in section 101(a) of the Immigration and Nationality Act (8 U.S.C. 1101(a)).
    4. The entity derives at least a majority of its funding or revenue from one or more United States persons that are United States citizens or lawfully admitted for permanent residence.

  • Large operating company. The exemption applies if all of the following criteria is met:

    1. The entity employs more than 20 full time employees, when applying the meaning of full-time employee provided in 26 CFR 54.4980H-1(a) and 54.4980H-3. In general, “full-time employee” means, with respect to a calendar month, an employee who is employed an average of at least 30 hours of service per week with an employer.
    2. More than 20 full-time employees of the entity are employed in the “United States,” as that term is defined in 31 CFR 1010.100(hhh).
    3. The entity has an operating presence at a physical office within the United States. “Operating presence at a physical office within the United States” means that an entity regularly conducts its business at a physical location in the United States that the entity owns or leases and that is physically distinct from the place of business of any other unaffiliated entity.
    4.   The entity entity filed a Federal income tax or information return in the United States for the previous year demonstrating more than $5,000,000 in gross receipts or sales. If the entity is part of an affiliated group of corporations within the meaning of 26 U.S.C. 1504, refer to the consolidated return for such group.
    5. The entity reported this greater-than-$5,000,000 amount as gross receipts or sales (net of returns and allowances) on the entity’s IRS Form 1120, consolidated IRS Form 1120, IRS Form 1120-S, IRS Form 1065, or other applicable IRS form.
    6. When gross receipts or sales from sources outside the United States, as determined under Federal income tax principle, are excluded from the entity’s amount of gross receipts or sales, the amount remains greater than $5,000,000.

  • Subsidiary of certain exempt entities. The exemption applies if the following criteria is met:

    1. The entity’s ownership interests are controlled or wholly owned, directly or indirectly, by any of these types of exempt entities:
      1. Securities reporting issuer, as defined in Exemption #1;
      2. Governmental authority, as defined in Exemption #2;
      3. Bank, as defined in Exemption #3;
      4. Credit union, as defined in Exemption #4;
      5. Depository institution holding company, as defined in Exemption #5;
      6. Broker or dealer in securities, as defined in Exemption #7;
      7. Securities exchange or clearing agency, as defined in Exemption #8;
      8. Other Exchange Act registered entity, as defined in Exemption #9;
      9. Investment company or investment adviser, as defined in Exemption #10;
      10. Venture capital fund adviser, as defined in Exemption #11;
      11. Insurance company, as defined in Exemption #12;
      12. State-licensed insurance producer, as defined in Exemption #13;
      13. Commodity Exchange Act registered entity, as defined in Exemption #14;
      14. Accounting firm, as defined in Exemption #15;
      15. Public utility, as defined in Exemption #16;
      16. Financial market utility, as defined in Exemption #17;
      17. Tax-exempt entity, as defined in Exemption #19; or
      18. Large operating company, as defined in Exemption #21.

  • Inactive entity. The exemption applies if all of the following criteria is met:

    1. The entity was in existence on or before January 1, 2020.
    2. The entity is not engaged in active business.
    3. The entity is not owned by a foreign person, whether directly or indirectly, wholly or partially. “Foreign person” means a person who is not a United States person. A United States person is defined in section 7701(a)(30) of the Internal Revenue Code of 1986 as a citizen or resident of the United States, domestic partnership and corporation, and other estates and trusts.
    4. The entity has not experienced any change in ownership in the preceding twelve-month period.
    5. The entity has not sent or received any funds in an amount greater than $1,000, either directly or through any financial account in which the entity or any affiliate of the entity had an interest, in the preceding twelvemonth period.
    6. The entity does not otherwise hold any kind or type of assets, whether in the United States or abroad, including any ownership interest in any corporation, limited liability company, or other similar entity.

  • Your company is a reporting company that does not qualify for an exemption. A report under the CTA is required.

  • Not a reporting company.

  • Identifying Beneficial Owners

    There are two ways a person might qualify as a "Beneficial Owner" of a reporting company. Both require the filing of necessary reporting documentation.

  • A beneficial owner is any individual who, directly or indirectly:

    1. Exercises substantial control over a reporting company; OR
    2. Owns or controls at least 25 percent of the ownership interests of a reporting company.

    An individual might be a beneficial owner through substantial control, ownership interests, or both. Reporting companies are not required to report the reason (i.e., substantial control or ownership interests) that an individual is a beneficial owner.

    A reporting company can have multiple beneficial owners. For example, a reporting company could have one beneficial owner who exercises substantial control over the reporting company, and a few other beneficial owners who own or control at least 25 percent of the ownership interests of the reporting company. A reporting company could have one beneficial owner who both exercises substantial control and owns or controls at least 25 percent of the ownership interests of the reporting company. There is no maximum number of beneficial owners who must be reported.

  • Reporting companies are required to identify all individuals who exercise substantial control over the company. There is no limit to the number of individuals who can be reported for exercising substantial control. An individual exercises substantial control over a reporting company if the individual meets any of four general criteria:

    1. the individual is a senior officer;
    2. the individual has authority to appoint or remove certain officers or a majority of directors of the reporting company;
    3. the individual is an important decision-maker; or
    4. the individual has any other form of substantial control over the reporting company. See the chart below for details about these criteria.

    Senior Officer:

    An individual holding the position or exercising the authority of a:

    1. President,
    2. Chief Financial Officer,
    3. General Counsel,
    4. Cheirf Executive Officer,
    5. Chief Operating Officer, or
    6. Any other officer, regardless of title who performs a similar function to these officers.

    Appointment or Removal Authority:

    An individual with the ability to appoint or remove any Senior Officer or a majority of the board of directors or similar body.

    Important Decision-Maker:

    An individual who directs, determines, or has substantial influence over important decisions made by the reporting company, including decisions regarding the reporting company's:

    1. Business, such as:
      1. Nature, scope, and attirbutes of the business
      2. The selection or termination of business lines or ventures, or geographic focus
      3. The entry into or termination, or the fulfillment of non-fulfillment, of significant contracts
    2. Finances, such as:
      1. Sale, lease, mortgage, or other transfer of any principal assets
      2. Major expenditures or investments, issuances of any equity, incurrence of any significant debt, or approval of the operating budget
      3. Compensation schemes and incentive programs for senior officers
    3. Structure, such as:
      1. Reorganization, dissolution, or merger
      2. Amendments of any substantial governance documents of the reporting company, including the articles of incorporation or similar formation documents, bylaws, and significant polices or procedures

    Catch-All:

    Any other form of substantial control over the reporting company. Control exercised in new and unique ways can still be substantial. For example, flexible corporate structures may have different indicatiors of control than the indicators above.

  • Company Applicant

    For business entities formed on or after January 1, 2024, the individual responsible for filing or directing the filing of the first registration document is the company applicant and must also complete a required report.

  • Required Documentation

    The following checklists may help you identify the information about your company, its beneficial owners and company applicants that you are required to collect and report.

  • FinCEN Identifiers. In leiu of submission of the above documentation for each Company Applicant and Beneficial Owener, the reporting company may submit the individual's FinCEN Identifier. This is a number that is requested by the individual by submitting the required documentation. The individual, and not the company, is then responsible for updating any change in circumstances (such as a move) to FinCEN. It will be considered good practice for companies to begin requiring beneficial owners to obtain a FinCEN identifier to limit the storage and potential distribution of sensitive personal information.

  • We can help.

    The implementation of the CTA is requiring a substantial burden on businesses and the penalties for non-compliance can include up to $500 / day or criminal charges in cases of deceptive practices. If you need help ensuring your compliance requirements are met, click the link below.
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