Corporate Transparency Act
The Corporate Transparency Act (CTA) went into effect on January 1, 2024. If you own a small business, you’ll want to take note, as this new law will likely affect you. Make sure you understand all the intricacies involved and how your business will be impacted. Otherwise, you could incur criminal or civil penalties.
Nearly every business entity in the United States now needs to file an initial beneficial ownership information (BOI) report with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN). If your company was formed prior to January 1, 2024, you will have until the end of this year, December 31, 2024, to file the BOI report.
The BOI report calls for the following information:
- Your entity’s name
- Your employer identification number (EIN)
- Name, residential address, and date of birth for each of the entity’s beneficial owners
- Photo ID for each of the entity’s beneficial owners
A beneficial owner is someone who has a major influence on the reporting company’s decisions or operations, owns at least 25% of the company’s shares, or controls the company’s equity.
What is the Corporate Transparency Act?
The Corporate Transparency Act was enacted in 2021. The goal is to combat illegal activity among businesses, including tax fraud, money laundering, and financing for terrorism. Many people with malicious intent use their business ownership status to facilitate illegal operations. This is a common tactic that affects national security and economic integrity.
The Corporate Transparency Act was created to prevent this from happening. It captures more ownership information for specific businesses operating in the United States. Under the new legislation, businesses that meet certain criteria must submit a BOI report to the U.S. Department of Treasury.
What Should I Do?
While you technically have until the end of the year, you are urged to file the report as soon as possible. You can do so by logging into FinCEN at www.fincen.gov. Do not ignore this requirement. It is important to file a timely BOI report, as the penalties are steep. They include a fine of $500 per day. If you have any questions or need assistance with filing your company’s BOI report, contact B.F. Godfrey from Godfrey Legal for support.
Watch out for scams. Be wary of fraudulent letters and emails that appear to come from FinCEN. FinCEN does not send out unsolicited messages to reporting companies. If you have any questions about any notification you receive regarding this filing, please contact Godfrey Legal.
Learn More About Business Law
Owning a business is not an easy task. Business owners have a lot to worry about, and forgetting to do something important can lead to financial disaster.
If you own a business, get the help you need. An Orlando business lawyer B.F. Godfrey from Godfrey Legal can help you understand the Corporate Transparency Act and other business laws. Fill out the online form or call (407) 890-0023 to schedule a consultation.
Source:
uschamber.com/co/start/strategy/small-business-corporate-transparency-act
