NEW REGULATIONS & HEAVY PENALTIES: IS YOUR BUSINESS AT RISK?
As your trusted advisers, we are providing you with this general information about new federal regulations affecting small to medium-sized corporations and LLCs.
• The Corporate Transparency Act (CTA) was passed in 2021 as part of the National Defense Authorization Act to prevent money laundering, terrorism financing, and other illicit financial activities.
• 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 US Treasury Department’s Financial Crimes Enforcement Network.
• Most businesses existing before January 1, 2024, must report 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, were required to report BOI within 60 days and those registered after 2024 must report within 30 days of formation.
• Each business must monitor and report any changes in this information within 30 days.
There are legal challenges to CTA currently working their way through the Federal Courts. However, the US Treasury Department has clearly stated it intends to enforce CTA now. The law clearly states you, as the business owner, are solely responsible and obligated to comply with the CTA requirements.
You can prepare and submit the required reports on your own. We cannot take your responsibility or obligations from you. However, we can offer you professional assistance in determining if this law applies to your business, gathering your information, preparing documents, and submitting your report. We cannot monitor your business ownership for reportable changes, but upon notification from you, we can assist you in reporting such changes, should they occur.
To provide these services we require a written engagement letter detailing the services to be provided, each party’s responsibilities and duties, and the related fees.
We also strongly suggest you seek experienced legal counsel in this matter if you deem it necessary as we are not licensed to provide legal services or advice.