04/05/2024
The Corporate Transparency Act (CTA) has shaken up the corporate landscape, especially for small businesses. Passed as part of the National Defense Authorization Act for Fiscal Year 2021, this legislation introduces new reporting requirements aimed at bringing more transparency to corporate ownership and crack down on financial crime. If you’re a small business owner, understanding these requirements is crucial. Let’s break it down in plain language.
Under the CTA, certain small businesses—like corporations, LLCs, and similar entities—must share details about who really calls the shots in their company. These “beneficial owners” are folks who hold at least 25% of the company’s ownership or have significant control over its operations. Why all the fuss? The CTA is designed to put a stop to shady dealings like money laundering and terrorist financing, often conducted through anonymous shell companies. By shining a light on who’s actually running the show, the government hopes to make it harder for bad actors to hide their tracks.
So, what do you need to do to comply? Unless your small business falls under one of the exceptions, you’ll need to disclose some details about your beneficial owners to the Financial Crimes Enforcement Network (FinCEN). Think names, dates of birth, addresses—the whole nine yards. And don’t forget those unique identifying numbers, like driver’s license or passport numbers.
Businesses formed before the start of 2024 have until December 31, 2024 to file its report with FinCEN. Businesses created in 2024 have ninety days from their formation to file and entities formed in future years will have only a thirty-day window in which to comply with the CTA’s filing requirements.
Now, we understand that navigating this stuff may feel like diving into a legal maze. That’s where we come in. At Reed Mawhinney & Link, we place an emphasis on corporate law and compliance. Our goal is to help small business owners like you understand what the CTA means for your company and guide you through the reporting process. We’ll work with you to ensure you’re ticking all the right boxes and avoiding stiff penalties along the way.
We have developed a streamlined one-hour meeting dedicated to efficiently walking you through the CTA, its application to your business, and providing informed, practical and thoughtful legal counsel on what you and your business will need to disclose to the CTA. If you are interested in scheduling a meeting, please call our office or contact us through our website, www.polklawyer.com
WILL LINK | ATTORNEY