12/02/2024
Important Information for You
New Federal Government Regulation for Small Businesses
The Corporate Transparency Act (CTA), part of the National Defense Authorization Act for Fiscal Year 2021 and effective from January 1, 2024, introduces essential changes for U.S. small business owners. This law aims to prevent money laundering and other illicit activities by increasing ownership transparency in LLC’s, corporations, and similar business entities.
Reporting is required:
The CTA mandates small business entities to report "beneficial owner" details to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.
Non-compliance can result in fines up to $10,000 and imprisonment for up to two years.
Who Must Report:
Beneficial owners, individuals who own at least 25% of or exercise substantial control over the reporting business entity must provide the required information to FinCEN. Required information includes full legal names, birth dates, addresses etc. See the linked article below for further information.
When Must the Report be Submitted:
An existing business entity must report before January 1, 2025, but if there is a change in “beneficial ownership” during 2024 the change must be reported within 90 days of the change.
A new business entity registered during 2024 must report within 90 days of state entity registration.
A new business entity registered after 2024 must report within 30 days of state entity registration