Definition of Corporate Transparency Act

The Corporate Transparency Act (CTA) is a part of the Anti-Money Laundering Act of 2020, enacted to enhance the transparency of legal entities to combat money laundering, terrorist financing, and other illicit activities. It requires certain U.S. businesses, particularly smaller companies and shell corporations, to disclose information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). The act aims to prevent anonymous shell companies from being used as vehicles for illicit activities by making ownership information available to law enforcement and financial institutions.