Synopsis and Financial Implications

 

Effective January 1, the Corporate Transparency Act (CTA) imposes beneficial ownership reporting on an estimated 33 million small businesses including limited liability companies, corporations, and others.  The purpose of the CTA is to crack down on money laundering and other financial crimes. The overwhelming majority of small businesses course have nothing to do with such illicit activities.  Even so, unless otherwise exempt, all such existing companies must report information to the U.S. government about their beneficial owners by the fast approaching deadline of January 1, 2025. Failure to comply with the CTA can trigger significant civil penalties ($500 per day up to $10,000) and up to two years of imprisonment.  Unauthorized use or disclosure of Beneficial Ownership Information (BOI) can trigger up to $250,000 in fines and up to five years’ imprisonment.  For a brief synopsis of the CTA, please see  CTA Synopsis 9-18-2024.

The CTA also carries implications for companies’ financial transactions.  For CTA investor implications, please see  CTA Synopsis – Investment Transactions 9-10-24.  For CTA implications for loan an other banking transaction, please see  CTA Synopsis – Banking Transactions 9-18-24.

If you are in need of CTA compliance assistance or wish further information about this important legislation, please contact us at [email protected],  [email protected] or (770) 399-9100.