As a business owner, staying ahead of changes in the law is critical to the survival of your company and its future.  The last thing you need is to be surprised by a notice from a government agency stating you’re not in compliance with the law and demanding you pay hefty fines.

But the stage is being set for just such a situation as new laws are going into effect on January 1, 2024.  The law is called the Corporate Transparency Act (CTA) and it’s set to catch a lot of business owners by surprise. 

This act, signed into law in 2020, is poised to reshape how businesses operate.  Failing to prepare can have dire consequences.  Let’s delve into what the CTA entails and why your company needs to have a plan for how to comply as the new year is just around the corner.

What is the Corporate Transparency Act?

The Corporate Transparency Act was introduced to combat illicit financial activities, money laundering, and the misuse of corporate structures for illegal purposes.

It requires companies to disclose their beneficial owners – individuals who ultimately own or control the company – to the Financial Crimes Enforcement Network (FinCEN). The aim? To enhance transparency, combat financial crimes, and promote accountability within corporate entities.

Why Should You Care?

The penalties for not complying with the CTA are steep.  You and your company are exposing yourselves to severe fines, sanctions, and even criminal charges.  Failing to file the required reporting or providing false information could result in fines of up to $10,000 per occurrence and imprisonment of up to two years.  Additionally, fighting legal battles and hefty fines can drain resources and severely impact your bottom line.

Steps to Prepare

Start taking proactive steps now to ensure compliance with the CTA.  Here’s what you can do to get out in front of this:

Identify Beneficial Owners: Thoroughly document and identify the individuals who qualify as beneficial owners within your company.

Compile Accurate Records: Ensure all necessary documentation regarding beneficial ownership is accurate, complete, and readily accessible.

Seek Professional Assistance: Talk to your business lawyer and CPA.  Ask the for guidance with how to ensure your compliance with these new legal requirements.

Implement Internal Protocols: Establish robust internal procedures to maintain ongoing compliance, ensuring that any changes in beneficial ownership are promptly reported.

Act Now

The Corporate Transparency Act isn’t just another piece of legislation; it’s a crucial framework that demands your attention. Ignoring its implications could be harmful to your company’s standing and finances. Compliance isn’t an option; it’s a necessity.

Prepare your business now to avoid the pitfalls of non-compliance. If you need expert guidance on how to comply with this new legislation and how to make sure your company isn’t exposed to penalties, schedule an appointment with us today.  We’re here to help you navigate this important aspect of your company’s future.