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(As of December 26th, 2024, the CTA reporting requirements are not enforceable due to a preliminary injunction. This article does not address details about the preliminary injunction and is intended solely to continue presenting and discussing reporting considerations under the CTA.)
As businesses navigate their reporting obligations under the Corporate Transparency Act (CTA), an important consideration is the age of majority requirement for beneficial owners. If a beneficial owner is a minor at the time of filing and a parent or guardian’s information was used in place of the minor’s, the business must update its filing when the minor reaches the age of majority, as defined by the laws of the state in which the entity is formed.
Below, we outline the key points your clients should consider when dealing with minor beneficial owners and the age of majority requirement.
Understanding the Age of Majority Requirement
In the context of the CTA, if a minor beneficial owner (as defined by the laws of the entity’s state of formation) reaches the age of majority, and previously a parent or guardian’s information was used in place of the minor’s, an updated report must be filed to list the individual’s information. It’s important to note that the reporting requirement is tied to the state of formation of the entity, not necessarily the state where the minor resides.
For example, if a business is incorporated in a state where the legal age of majority is 18, but the minor beneficial owner lives in a state where the legal age of majority is 21, the business must file an updated report when the individual turns 18, as per the state of formation’s law.
Why This Matters
The key takeaway is that businesses must remain aware of any minor beneficial owners and track when they reach the age of majority in the state of formation. Failing to file an updated report promptly after the individual reaches the age of majority could result in non-compliance with CTA reporting requirements.
Age of Majority by State
Since the age of majority laws vary by state, businesses must understand the specific laws that apply to their state of formation. Below is a breakdown of the age of majority for various states:
- 18 Years Old: AK, AZ, AR, CA, CO, CT, DE, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY
- 19 Years Old: AL, NE
- 21 Years Old: MS
This list is important to cross-check as the age of majority laws may change. Businesses and professionals should reference this information when setting reminders for any updated reports required as a result of a minor coming of age.
Disclaimer: This article is intended for informational purposes only and does not constitute legal advice. For advice on specific legal issues, consult with a qualified attorney.
