The Corporate Transparency Act (CTA), enacted in 2021 with bipartisan support, represents a significant step in curbing illicit finance within the United States. Its aim is straightforward: to enhance transparency by requiring many companies operating in the U.S. to report information about their ultimate beneficial owners or controllers.

Unfortunately, while its aim is straightforward, the actual language is daunting to most small business owners. https://www.congress.gov/bill/116th-congress/house-bill/2513/text

FUN FACT: The initiation of the Corporate Transparency Act stemmed from the efforts of Florida Senator Marco Rubio. He expressed concern about the influx of over $1 billion linked to prominent Venezuelan officials into the real estate market in Miami. https://www.rubio.senate.gov/rubio-colleagues-urge-treasury-to-fully-implement-corporate-transparency-act/

Here we hope to break down what it all means in laymen’s terms, so you can begin to think about this new requirement. This introduction certainly won’t answer every question, but that is what Lacey Lyons Rezanka is here for.  We can provide a comprehensive review and recommendation for your specific situation.

Who Needs to Comply?

CTA applies to large and small business alike. If you’re wondering whether your business falls under the purview of the CTA, here’s a quick rundown. Reporting companies encompass both domestic and foreign entities, including corporations, LLPs, LLCs and similar entities formed or registered with a state’s secretary office. However, certain entities such as banks, SEC-reporting companies, and public accounting firms are exempted.

What’s Required?

For reporting companies, the CTA mandates reporting of beneficial ownership information to the US Treasury Financial Crimes Enforcement Network (FinCEN), including details like full legal names, birthdates, addresses, and identifying documents of beneficial owners. The reporting process is not an annual requirement but rather a one-time filing, with updates required only if information changes.

Deadlines for Compliance

Existing reporting companies formed before January 1, 2024, must file their initial reports by January 1, 2025. Entities created in 2024 have 90 days from the date of registration or formation to file their reports. Entities created in 2025 or later have 30 days from the date of registration or formation to file.

That said, Florida companies may wish to register at the time they do their 2024 annual report to the State of Florida Division of Corporations (“Sunbiz”).  This annual exercise under Florida law can serve as a reminder for businesses in subsequent years to review their documentation for changes and determine if an update should be filed with FinCEN.

The Ramifications of Non-Compliance

The consequences of non-compliance with the CTA are not to be taken lightly. Civil penalties of up to $500 per day or $10,000 per incident may be imposed for false information or failure to comply.  In some circumstances, fines can snowball, with aggregate fines above $10,000 if corrections and amendments are timely submitted. Additionally, violators could face criminal penalties, including imprisonment for up to two years.

How We Can Help

Navigating the intricacies of regulatory compliance can be daunting, but you don’t have to do it alone. Our team of experienced attorneys specializes in guiding businesses through compliance with various regulatory frameworks: local, state and Federal code — including the CTA. From initial filings to ongoing monitoring and updates, we’re here to ensure your business meets its obligations effectively and efficiently.

Take Action Today

With the deadline for compliance approaching, now is the time to act. Don’t risk the penalties and reputational damage associated with non-compliance. Reach out to us today to learn how we can help your business navigate the requirements of the Corporate Transparency Act and stay on the right side of the law.

1. Assessment Services: Lacey Lyons Rezanka is adept at providing review and analysis of businesses. Through comprehensive evaluations, the firm assists companies in determining their status as reporting entities under the CTA. This includes identifying possible exemptions and determination of beneficial owners.
2. Filing Services: For businesses requiring federal filing under the CTA, Lacey Lyons Rezanka is ready to take this burden off your to-do list. The firm’s expertise ensures accurate and timely submissions, mitigating the risk of penalties associated with non-compliance.

Fraud Alert

While the reporting requirements have only been in effect for a short time, scammers are already hard at work to get your precious financial information.  The US Treasury’s Financial Crimes Enforcement Network (FinCEN) warns:

Alert: FinCEN has been notified of recent fraudulent attempts to solicit information from individuals and entities who may be subject to reporting requirements under the Corporate Transparency Act. The fraudulent correspondence may be titled “Important Compliance Notice” and asks the recipient to click on a URL or to scan a QR code. Those e-mails or letters are fraudulent. FinCEN does not send unsolicited requests. Please do not respond to these fraudulent messages, or click on any links or scan any QR codes within them.

https://www.fincen.gov/boi

You can make an appointment with our firm for a full review of your needs with a simple call.  Please be wary of any unknown entity asking you to follow a link or scan a code.

If you do not contact us, we will assume that you are ensuring compliance on your own without the need for services from Lacey Lyons Rezanka.