Corporate Transparency Act (Compliance and Penalties)

The majority of business owners, including the real estate investors and small family businesses, will be affected by the Corporate Transparency Act (CTA). CTA, effective on January 1, 2024, requires reporting entities to disclose the information about their beneficial owners.

(see last week’s newsletter for compliance requirements)

When do business owners need to comply with the Corporate Transparency Act?
Compliance with the Corporate Transparency Act is crucial for affected business owners. The Act sets a compliance deadline of January 1, 2024. By this date, all covered entities must submit the required beneficial ownership information to FinCEN.

What are the potential consequences of non-compliance?
Failure to comply with the Corporate Transparency Act can result in significant penalties and legal consequences. Business owners who fail to report their beneficial ownership information may face civil and criminal penalties, including fines and imprisonment.
Failing to file a timely report may cause a penalty of $500.00 per day to a maximum of $10,000.00 or even up to two years of imprisonment.

How can business owners prepare for compliance?
To ensure compliance with the Corporate Transparency Act, business owners should take the following steps:

1. Review their entity structure: Determine whether their business falls under the Act's purview and understand the reporting requirements accordingly.

2. Identify beneficial owners: Identify and gather the necessary information about their ultimate beneficial owners, including their names, dates of birth, addresses, and identification numbers.

3. Seek legal guidance if required: If business owners have any doubts or concerns about complying with the Act, it is advisable to consult legal professionals specializing in corporate law or compliance.

In conclusion, the Corporate Transparency Act represents a significant regulatory change for businesses. It emphasizes the importance of transparency in corporate ownership to combat money laundering and terrorist financing. Business owners must familiarize themselves with the Act's requirements, ensure timely compliance, and seek appropriate professional assistance if needed. By doing so, they can navigate the landscape of increased corporate transparency and contribute to a more secure and trustworthy business environment.

Our Office Can Help

Click here to Schedule a FREE Virtual Estate Planning Session. We will guide you through the entire process and help you understand what needs to be done to ensure your loved ones are taken care of.

PARENTING TIP:

Protect that smile. Encouraging your kid to brush twice a day with a dab of fluoride toothpaste will guard against cavities.