In 2021, Congress enacted the Corporate Transparency Act (CTA) with the aim of tackling serious financial crimes, including terrorist financing, money laundering, and other illicit activities. This landmark legislation represents a significant shift in how businesses must report ownership information, aiming to increase transparency and accountability within corporate structures.

What is the Corporate Transparency Act?

Starting January 1, 2024, the CTA mandates that most companies provide detailed information about their “beneficial owners” to the Financial Crimes Enforcement Network (FinCEN). Beneficial owners are defined as the individuals who ultimately own or control the company. This requirement is designed to make it more difficult for those involved in financial crime to hide behind anonymous corporate entities.

Penalties for Non-Compliance

The new reporting requirements come with serious consequences for non-compliance. If a company fails to file the required information or submits fraudulent reports, it could face substantial penalties. Civil fines can reach up to $500 per day for each day the reports are missing or inaccurate. In addition to civil penalties, criminal sanctions are also a risk, with fines up to $10,000 and potential jail time of up to two years for severe violations.

Why You Need Professional Help

Given the complexity and potential consequences of the CTA, it is crucial for businesses to ensure compliance. We strongly recommend hiring an experienced business attorney to prepare and file the Beneficial Owner Information Report, which is now required by federal law. Proper legal guidance can help navigate the intricacies of the reporting requirements and avoid costly penalties.

For further information or assistance, please contact J. Brian King, Business Attorney, at bking@businessattorneylaw.com or call 706-364-1239. Ensuring compliance with the CTA is essential for protecting your business from legal and financial repercussions.