NEW REGULATIONS & HEAVY PENALTIES: IS YOUR BUSINESS AT RISK?

NEW REGULATIONS & HEAVY PENALTIES: IS YOUR BUSINESS AT RISK?

As your trusted advisers, we are providing this general information about new federal regulations affecting small to medium-sized corporations and LLCs.

The Corporate Transparency Act (CTA)

  • The CTA was passed in 2021 as part of the National Defense Authorization Act to prevent money laundering, terrorism financing, and other illicit financial activities.

  • The CTA requires most businesses to report personal information about all individuals who, directly or indirectly, exercise substantial control or own at least 25% of a reportable business to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

  • Most businesses existing before January 1, 2024 must file their reports by January 1, 2025.

  • Failure to comply can result in significant penalties including fines of $500 per day, up to $10,000, or even criminal charges.

  • New businesses registered on or after January 1, 2024 must report their Beneficial Ownership Information (BOI) within 60 days of registration.

  • Businesses registered after 2024 must report within 30 days of formation.

  • Each business must monitor and report any changes in this information within 30 days of the change.

Important Notes

  • There are legal challenges to the CTA currently working their way through the federal courts. However, the U.S. Treasury Department has stated it intends to enforce the CTA now.

  • The law clearly states you, as the business owner, are solely responsible and obligated to comply with the CTA requirements.

How We Can Help

  • You can prepare and submit the required reports on your own.

  • While we cannot assume your legal responsibility or obligations, we can offer professional assistance with:

    • Determining if this law applies to your business

    • Gathering the necessary information

    • Preparing required documents

    • Submitting your report

  • We cannot monitor your business ownership for reportable changes, but if you notify us of a change, we can assist in reporting it.

  • To provide these services, we require a written engagement letter outlining:

    • The services to be provided

    • Each party’s responsibilities and duties

    • Related fees

Legal Disclaimer

We strongly recommend that you seek experienced legal counsel if you deem it necessary. We are not licensed to provide legal services or legal advice.