Carta helps new startups comply with the Corporate Transparency Act

Carta helps new startups comply with the Corporate Transparency Act

Author: Reed McBride
Read time:  2 minutes
Published date:  December 21, 2023
Carta Launch will help new startups forming in the U.S. to comply with the Corporate Transparency Act.

Effective January 1, 2024, virtually all new companies being incorporated in the United States will need to comply with the Corporate Transparency Act (CTA). This new law will require them to submit an initial filing regarding the company’s beneficial ownership within 90 days of incorporation, and make mandatory updates as the company’s ownership and governance structures evolve. Companies must submit these filings to FinCEN, a division of the U.S. Treasury Department. 

While the aim of this legislation is anti-money-laundering (AML)—to identify corporate shells used for illicit purposes—millions of legitimate businesses will be subject to the CTA’s disclosure regime. For the law’s first year in effect, the regulations will only apply to the newest companies, meaning those with the fewest resources and the least sophisticated compliance programs will be the first required to file. 

Carta is helping founders comply by offering a free CTA compliance solution as soon as the new regulations go into effect on January 1, 2024. 

Our CTA compliance solution is also embedded in Carta’s free Launch plan, so startups (and their counsel) can use it even if the company has not raised any financing. 

CTA compliance on Carta has been designed for ease-of-use, leveraging ownership data that’s already collected during the Launch onboarding process to populate the CTA filing. Carta’s KYC/AML technology allows for easy, secure collection of any additional pieces of data (e.g. photos of government IDs) that may be required from your company’s beneficial owners prior to submission. 

Through Carta Launch, we’ve helped over 10,000 companies get started. Collectively, they’ve raised over $23B and built over $135B in market value. We combined this experience helping founders with deep private-markets policy expertise, to create a simple and easy CTA compliance workflow. We then refined our CTA compliance solution with input from over 50 leading law firms, who collectively work with tens of thousands of startups on Carta. As our product team built the solution in Launch, Carta’s Policy Team led a broad policy coalition to collaborate with FinCEN, push for clarifications to help founders comply, and lobby for the government to provide API docs to streamline submission of CTA filings. 

If you need to prepare (or update) your company’s CTA filing, get started on Launch today. 

Reed McBride
Author: Reed McBride
Reed McBride joined Carta in 2019 and is VP of Strategic Partnerships + Ecosystem at Carta, and an active early-stage investor. Reed started his career as a start-up attorney at Orrick, advising tech companies on billions of dollars of VC and M&A transactions. He then scaled two start-ups over five years, building new teams and leading a diverse range of functions. Reed holds a BS in Mechanical Engineering with Highest Honors from the University of Illinois and a JD from Berkeley Law, where he graduated Order of the Coif and served on the California Law Review. When he's not at work, you can usually find him on a trail with his three kids.
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