What Business Owners Need to Know about the Corporate Transparency Act (CTA)

Did you know that as of January 1, 2024, the Corporate Transparency Act (CTA) has kicked in, bringing a wave of new requirements for businesses like yours? If you’re thinking this sounds like something you can deal with later, think again!

It’s already June, and the clock is ticking. Don’t let the government catch you off guard—ensure your business complies with the CTA now, or risk facing hefty penalties! 

Key Points for Business Owners 

Who is Affected? 

The CTA targets all types of business entities, especially small limited liability companies (LLCs) and partnerships. If your estate plan includes an entity for holding out-of-state real property, valuable personal property, or for asset protection and valuation discounts, you are likely required to comply with the CTA. 

Reporting Requirements 

Businesses must report beneficial ownership information, including: 

  • Names 
  • Dates of birth 
  • Addresses 
  • Identification numbers of owners with substantial control or ownership. 

FinCEN’s website now accepts company reports online. You can file by completing a fillable PDF, filling out the information directly on the website, or using API data integration. 

Compliance Deadlines 

  • Existing companies must file their initial ownership report by January 1, 2025. 
  • Companies formed in 2024 or later have 90 days to file their initial report. 
  • Any changes in ownership information must be reported within 90 days. 

Penalties for Non-Compliance 

Failing to comply with the CTA can lead to severe penalties, including: 

  • Civil Penalties: Up to $500 per day for each day the violation continues. 
  • Criminal Penalties: Fines of up to $10,000 and imprisonment for up to two years. 

These penalties can quickly add up, potentially crippling your business financially and legally. It’s crucial to ensure your business meets all CTA requirements to avoid these harsh consequences. 

The Unconstitutional Ruling 

In March 2024, a federal district court ruled the CTA unconstitutional in National Small Bus. United v. Yellen. The court found that Congress lacked the authority to mandate such disclosures. This ruling is likely to be appealed, and its implications could affect the enforcement of the CTA. 

Why Compliance Matters 

Non-compliance with the CTA can result in severe penalties, including fines and imprisonment. Ensuring that your business complies with these requirements is crucial to avoid legal repercussions. 

How We Can Help 

Navigating the complexities of the CTA can be daunting. As an estate planning attorney, we help business owners understand and comply with these new regulations. If you have a business and would like to chat about how to become compliant with the CTA or discuss business succession in your overall estate plan, our services include: 

  • Assessing your business’s compliance needs. 
  • Preparing and filing the necessary reports. 
  • Advising on ongoing compliance to ensure you meet all deadlines and requirements. 

Stay Informed and Compliant 

With the ever-changing regulatory landscape, it’s essential to stay informed about the latest developments related to the CTA. Our firm is committed to keeping you updated and providing the necessary resources to ensure your business remains compliant. 

Don’t wait until the last minute to start working on your CTA compliance. Contact us today to schedule a consultation and secure your business’s future. We’re here to help you navigate the complexities of the Corporate Transparency Act with ease and confidence. 

E. Regine Francois Williams, Esq. is the owner and managing attorney at Francois Williams Legal., serving clients throughout Maryland, the District of Columbia, and Florida. Schedule a consultation today by calling us at (301) 358-0377 (Maryland) or (954) 372-2021 (Florida). 

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