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Enacted by the U.S. Congress in 2021, the Corporate Transparency Act (CTA) sets January 1, 2025, as the final date for filing beneficial ownership information (BOI) with FinCEN for US businesses registered before 2024.
The Corporate Transparency Act 2025 reporting deadlines are approaching rapidly, leaving little time to make the filings and disclosures and adding friction to creating new entities.
Below, we discuss who is affected by the CTA and who qualifies for an exception, outline the filing requirements and penalties for non-compliance and offer a practical, actionable roadmap for beneficial ownership reporting assisted by technology.
The Corporate Transparency Act is part of broader anti-money laundering regulations implemented to ensure financial transparency for corporations and other companies doing business in the United States. The CTA is viewed as a major step by the U.S. aimed at combating illicit activities, corruption, fraud, money laundering, and terrorism.
The principal target of the CTA is shell companies created by actual entity owners to build a layer of privacy within the ownership structure. The new law requires disclosing the identities of individual beneficial owners, who own or control at least 25% of a company's interest or exercise substantial control.
After being passed by Congress in 2021, the CTA went into effect in 2024, requiring reporting companies to make disclosures through FinCEN's Beneficial Ownership E-Filing System. While new companies created or registered in 2024 have 90 days to file BOI after their registration, U.S. legal entities created before 2024 have to fulfill their beneficial ownership reporting by January 1, 2025.
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According to the Corporate Transparency Act 2025 reporting requirements, LLCs, corporations, and other entities registered to do business in the United States—referred to as "reporting companies"— are required to make disclosures of their BOI. The law affects both domestic and foreign reporting companies operating in the United States, which are created by filing a document with a U.S. Secretary of State or a similar authority.
At the same time, the CTA provides exemptions for 23 types of entities that are not considered reporting companies under new anti-money laundering regulations. The list of exceptions includes large operating companies, banks, venture capital firms, broker-dealers and other institutions which already have their own disclosure obligations to FinCEN.
That said, many smaller and medium-sized businesses, as well as branches of foreign entities registered in the U.S., are significantly impacted.
The new business reporting requirements for 2025 oblige legal entities to file information about themselves, their beneficial owners and so-called company applicants, who are responsible for entity formation and filings.
A legal entity falling under the Corporate Transparency Act 2025 reporting framework needs to file information about its legal name and any trade name, aka "doing business as" or d/b/a/ business name, as well as its principal address, jurisdiction and tax ID number. Importantly, the reporting company can only report its U.S. street address, which cannot be a P.O. box.
The required data points for each beneficial owner and company applicant include:
The reporting company shall disclose this information once during initial beneficial ownership reporting without obligations for annual filings. If any of the details about the entity, its beneficial owners or company applicants change, the updated report should be filed to FinCEN not later than 30 days after the date of the change.
The penalties for violating business compliance laws 2025 reporting include both civil penalties for "United States persons" as well as criminal liability for involved individuals. In the context of the law, a United States person includes not only residents but also legal entities, such as LLCs, corporations, partnerships and trusts.
The Corporate Transparency Act 2025 civil penalties for United States persons are set as $591 per day of violation, adjusted from $500 in the initial text of the law for inflation.
Meanwhile, an individual who is found to be willfully violating the beneficial ownership reporting requirements can face a criminal penalty of up to two years in jail and a fine of up to $10,000. The list of violations subject to criminal responsibility includes a failure to file a beneficial ownership report, filing false data or failure to correct or update previously filed information.
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While the countdown to the final date to fulfill Corporate Transparency Act 2025 reporting requirements is about to finish in a few months, those who missed the CTA preparations still have time to avoid penalties and comply.
The roadmap to CTA compliance involves several steps that can be streamlined with the help of technology, including:
With the considerable number of data points that need to be reported under the Corporate Transparency Act in 2025, many organizations struggle to collect and verify their information across all their legal entities and ensure compliance.
This is where a modern entity management software like Athennian can help and become your lifeline in the CTA compliance race by streamlining compliance work with a central cloud database for all corporate records immediately accessible on any device.
Athennian entity management software helps businesses of all sizes with their beneficial ownership reporting through customizable pre-populated templates, automated processes, and handy reminders. For more information on how Athennian can simplify compliance with CTA 2025, please don't hesitate to contact our team to request a free demo.
"Very easy to use, modern interface, excellent support. Athennian has an amazing conversion team. They helped us migrate all of our data and the training was very good."
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“When we were reviewing other entity management systems on the market, in some cases, we were not comparing apples to apples. But with Athennian, there was really no comparison. The paralegals were so excited to come on board.”
"There are so many things I like about this program, but the one thing that really stands out is the user friendly interface. The program is fast and allows me to enter corporate information very quickly and efficiently. I would also like to note that Athennian provides the most the fantastic customer service."
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