Have a corporation? LLC? Comply with the CTA or face a stiff penalty. What about an HOA? Shruti Gurudanti, Rose Law Group partner and director of corporate transactions, sheds light

By Estela Anahi Jaramillo | The Business Journal

Around 32.6 million businesses in the United States may be required to comply with the Corporate Transparency Act (CTA). The CTA is a federal law that came into effect on Jan. 1 that imposes new reporting obligations on millions of business entities. It was enacted into law as part of the National Defense Act in 2021 and requires disclosing certain institutions’ beneficial ownership information (BOI) on individuals who own or control a company.

While a federal judge last week ruled against the CTA as unconstitutional, reported tax information firm Wolters Kluwer, the narrow nature of the summary judgment means BOI reports are still obligated by tens of millions of businesses except for less than 65,000 members of the National Small Business Association.

The BOI reporting is intended to help U.S. law enforcement combat money laundering, the financing of terrorism and other illicit activity. CTA is not part of the tax code, but rather part of the Bank Security Act.

A beneficial owner is any individual who, directly or indirectly, exercises “substantial control” over a reporting company or owns or controls at least 25% of the ownership interests of a reporting company.


“Homeowners associations (HOA) and Condominium Associations (Condo Associations) in Arizona are likely subject to the CTA and barring any changes to the law should  continue to work with their legal professionals to prepare and file the reporting requirements.”
– Shruti Gurudanti, Rose Law Group partner and director of corporate transactions

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March 2024