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    • Apr 25
    • 2 min read

Maintaining Privacy under the Corporate Transparency Act


The Corporate Transparency Act

The Corporate Transparency Act (CTA) became effective on Jan. 1, 2024 and its requirements cover over 32 million small businesses. Pursuant to the CTA most small businesses must file information disclosing information and identities of owners of those small businesses with the Financial Crimes Enforcement Network (“FinCEN”).


What type of information must be disclosed?

The reporting company must submit information to FinCEN about: (1) the reporting company, and (2) each beneficial owner and company applicant. This includes:

  • the name, date of birth, and street address of each beneficial owner and company applicant; and

  • an image of an approved identifying document (e.g., a non-expired passport or driver’s license) proving the veracity of that information, among other things.


For people who have ownership interests in many small businesses, they are faced with providing this private information to lots of business entities who have unknown data privacy practices.  It’s a recipe for data breaches and identity theft. 


How do you protect your privacy?

Owners and investors who have privacy concerns are encouraged to get a FINCEN identification number.  FINCEN has provided the ability for every individual to get a FINCEN identification number by providing FINCEN with:

  • Full legal name; and

  • Identification (US passport, driver’s license, state ID card, or a foreign passport if available).


FINCEN will then issue a number so that the owner/investor need only provide the reporting company their individual FINCEN number. This means the individual will not have to disclose their residential address or copy of their ID to the company if an individual wishes to maintain privacy. If the owner/investor moves or changes their name, the individual has 30 days to disclose such information to FINCEN.  It relieves the owner/investor of the burden of relaying changes to all the companies in which they have an ownership interest. It’s a one-stop reporting obligation.

  

The experienced team of business attorneys at Fiffik Law Group are here to help you understand how the Corporate Transparency Act impact your business. We will help you comply with the Act and establish policies so that your business can remain in compliance. 

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