, The CTA: Is my Small Business Exempt From Filing?, Abrahams Kaslow & Cassman LLP | Attorneys at Law

By Alex Montoya

As discussed in previous issues of this Newsletter, the Corporate Transparency Act (the “CTA”) is set to drastically increase the amount of corporate ownership information domestic and foreign business owners conducting business in the United States will need to report to the federal government.

Set to take effect on January 1, 2024, the CTA will impose new requirements on millions of small and medium-sized businesses.

Under the provisions of the CTA, any entity created by filing a document with a Secretary of State or similar office is subject to the new reporting requirements. This would include corporations, limited partnerships and limited liability companies.

However, despite the CTA’s broad applicability, there are several entities exempt from the reporting requirements. Some of the entities excluded from the CTA include:
• Banks, credit unions & bank holding companies
• Money services businesses
• Brokers or dealers in securities, securities exchange or clearing agencies
• Investment companies or investment advisers
• Insurance companies & state-licensed insurance producers
• Accounting firms
• Tax-exempt entities
• Large operating companies:
– 20 or more full-time employees in the U.S.
– Operating presence at a physical office in the U.S. (not including a residence or shared space, except spaces shared with affiliates); and
– Filed a tax return in previous year showing more than $5 million in U.S.-sourced gross receipts or sales.

Prior to January 1, 2025, business owners should examine their businesses and consult with legal counsel to determine whether their entities are exempt. Willful non-compliance with the CTA
comes with considerable penalties, so business owners should exercise great caution when determining the applicability of the CTA.

If you want to know more about the CTA and whether your business may be exempt, please contact Alex Montoya at [email protected].