WILMINGTON, Del.--(BUSINESS WIRE)--New research by CSC among senior in-house legal and compliance executives has found that an overwhelming majority (83%) are concerned about their own organization’s compliance with the Corporate Transparency Act (CTA), while over three quarters (76%) believe the CTA is causing concern amongst U.S. businesses more broadly. A mere 1% of those surveyed have no concerns about their organization’s CTA compliance.
The CTA took effect on January 1, 2024, with the objective of giving law enforcement and other government agencies more tools to protect national security and fight corruption, terrorism, and money laundering.
The study by CSC1, the world’s leading provider of global business administration and compliance solutions, was commissioned among 200 senior professionals including general counsels and corporate secretaries across a broad range of industries in the U.S., Continental Europe, the U.K., and APAC, to gauge their views on the introduction of the Act. Respondents were from U.S.-based corporations and non-U.S. based multinational corporations with entities registered in the United States.
The findings, detailed in a new report, “The Corporate Transparency Act: Readiness, Concerns, and Implications,” shed new light on their primary concerns, key compliance challenges, and the longer-term implications of the law’s introduction.
“While CTA regulation has been in effect since the start of this year, organizations are still grappling with what it means for them,” says Julie Dallmann, product management director at CSC. “The legal complexities involved are unchartered territory for many, with the different moving parts both challenging to interpret and balance.”
The research found that while nearly all (93%) respondents said they’re aware of the CTA, widespread uncertainty around its intricacies remains. Less than half (45%) of respondents surveyed are aware of the CTA’s reporting requirements at this stage, and only 39% are aware of the reporting deadlines. Just a third are familiar with the CTA’s exemptions.
CSC’s study identified the lack of guidance around what non-U.S. entities need to do as a major concern among respondents, with nearly two-thirds (62%) citing this as a challenge ahead of high fees and costs, and a lack of understanding around the penalties for CTA non-compliance (both of which were identified by nearly 40% of respondents).
“The extent to which businesses are still feeling unfamiliar or uncomfortable about their organization’s ability to comply with the CTA is worrying but unsurprising,” says Julie. “It’s clear the subjectiveness of the CTA, including ambiguity around exemptions and the question of who within an organization meets the definition of being a beneficial owner, is causing uncertainty as to its provisions.
“With much of the onus on the organization to ensure compliance, these complexities are driving more businesses to partner with third-party service providers who are able to ensure compliance with the CTA, allowing them to focus on their strategic business priorities.”
To receive a copy of CSC’s “The Corporate Transparency Act: Readiness, Concerns, and Implications report,” contact Camilla Wyatt at cscteam@citigatedewerogerson.com.
Notes to editors
1CSC, in partnership with Pure Profile, surveyed 200 general counsels, corporate secretaries, and other senior in-house legal and compliance executives from across a broad range of industries in the U.S., Continental Europe, the UK, and APAC, to gauge views on the introduction of the Corporate Transparency Act, which took effect on January 1, 2024. Respondents were from U.S.-based corporations or non-U.S. based multinational corporations with entities registered in the United States.
About CSC
CSC is the trusted partner of choice for more than 90% of the Fortune 500®, more than 90% of the 100 Best Global Brands (Interbrand®), and more than 70% of the PEI 300. We are the world’s leading provider of global business administration and compliance solutions, specialized administration services to alternative asset managers across a range of fund strategies, transactions involving capital markets participants in both public and private markets, domain name system management and digital brand and fraud protection, and corporate tax software solutions. Founded in 1899 and headquartered in Wilmington, Delaware, USA, CSC prides itself on being privately held and professionally managed for more than 125 years. CSC has office locations and capabilities in more than 140 jurisdictions across Europe, the Americas, Asia Pacific, and the Middle East. We are a global company capable of doing business wherever our clients are—and we accomplish that by employing experts in every business we serve. We are the business behind business®. Learn more at cscglobal.com.
