Attention all small businesses! Have you heard of the Corporate Transparency Act? I heard about it a few months ago and was ignoring it. But, today I found out that this is not to be ignored unless you have lots of extra money sitting around to pay a nice fine.
As the government combats terrorism, money laundering, and other illegal activities, the Corporate Transparency Act is designed to gain ownership information of small businesses.
There are a few exclusions, but if you’re doing business as an LLC, corporation, partnership, as a fictitious name, or other types of registered entities, you will have to comply with the Corporate Transparency Act by the end of 2024. Is this you?
Some exclusions include:
- More than 20 full-time employees in the United States, AND
- More than $5 million in gross receipts or sales, AND
- An operating presence at a physical office in the United States.
There are several other exclusions, and you can find out more information on the FinCen (Financial Crimes Enforcement Network) site here.
If you don’t file the information, by January 1, 2025, you may be subject to fines of $500 per day (and possibly even jail time!).
If you’re thinking, “Oh well, what’s $500? Small price to pay.” That’s only assuming the government is efficient enough to notice you haven’t filed after just one day. They won’t. In fact, it could be years before they notice you haven’t filed your beneficial ownership information. $500 a day will add up quickly!
But, when it comes to the government, ignorance is NOT bliss. They don’t care if you “didn’t know about it.” And now they’re empowered to enforce, with fines of up to $500 per day and possible jail time.
Don’t get caught up in this. If you didn’t know about the Corporate Transparency Act, you do now!
Complying with the Corporate Transparency Act is relatively simple and there is NO filing fee.
What do I need to do, you ask:
The first thing you need to do is determine if you are required to file beneficial ownership information (BOI).
The general rule of thumb on who needs to file under the Corporate Transparency Act is:
The Corporate Transparency Act (the “CTA”) is a law that mandates that a business entity must disclose who the beneficial owners of the entity are.
ANY business entity formed by application is subject to the CTA. These entities include:
- Corporations (both C and S status);
- Partnerships (both general and limited);
- Professional Corporations;
- Limited Liability Entities (in all forms);
- And possibly even sole proprietors that operate a DBA with a fictitious name.
That means you need to file beneficiary ownership information by January 1, 2025. If you operate a business using your real name, you may not need to file because the government (and the public) can clearly determine who owns and operates the business (some exceptions apply).
Filing your BOI is simple, yet still intimidating, especially if you’re busy. I recently completed a training pertaining to the Corporate Transparency Act and am ready to be your facilitator and assist you in getting your BOI filing completed.
I am not attorney and the above shall not be construed as legal advice. If you have any questions, I have attorney contacts that I am happy to refer you to.
Wendy
Diem Notary & Paralegal Services, LLC
Lancaster, PA
