Corporate Transparency Act 2024 – Impact on LLCs
What is the Corporate Transparency Act?
The Corporate Transparency Act is a law passed in 2021 that requires many businesses in the United States to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). This is to help prevent criminals from using businesses for illegal activities such as money laundering and terrorism financing.
Who does the CTA apply to?
The CTA applies to most businesses formed in the United States, including LLCs, corporations, and limited partnerships. There are some exceptions, such as publicly traded companies, banks, and certain investment firms.
What information needs to be reported?
Businesses need to report the names, addresses, and dates of birth of their beneficial owners. A beneficial owner is anyone who owns or controls 25% or more of the business.
When does the information need to be reported?
New businesses need to report this information within 90 days of formation. Existing businesses had to report by December 31, 2024, but there may be an extension.
What are the penalties for non-compliance?
Businesses that do not comply with the CTA can face fines of up to $591 per day and even criminal penalties.
How can businesses comply with the CTA?
Businesses can comply with the CTA by filing a report with FinCEN. They can do this themselves or hire a professional to help them.
Are there any concerns about the CTA?
Some people believe that the CTA is unconstitutional or that it will be too burdensome for businesses. There are also concerns about the security of the information that is collected.
Additional points:
- The deadline for existing businesses to comply may be extended.
- The information reported to FinCEN is not publicly available.
- Businesses need to keep their reported information up to date and report any changes within 30 days.
Corporate Transparency Act 2024: Impact on LLCs | How To With Gino Barbaro
Join Gino Barbaro, co-founder of Jake and Gino, in this enlightening episode of “How To with Gino Barbaro,” as we delve deep into the nuances of the Corporate Transparency Act (CTA). If the CTA is new to you, or even if you’ve heard of it but aren’t fully aware of its implications, this episode is a must-watch. Gino is joined by experts Harry Barth from Bath Cauldron and Paul Hitchcock to discuss everything you need to know about the CTA, from its origins to its impact on over 33 million entities in the United States.
Key Takeaways:
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What is the CTA?: Learn about the background, purpose, and significant implications of the Corporate Transparency Act, aimed at enhancing transparency for law enforcement and combating illegal activities.
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Compliance Essentials: Discover the critical aspects of complying with the CTA, including the deadlines, potential penalties for non-compliance, and the detailed process for filing your entity information with FinCEN.
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Impact on Businesses: Understand how the CTA affects every entity in the U.S., not just new ones but also those established decades ago. Our experts break down the requirements, exemptions, and specific scenarios that could affect your business.
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Expert Insights: Harry Barth offers his expertise on navigating the complexities of the CTA, sharing valuable advice on ensuring your entities are in full compliance without facing the steep penalties or criminal charges for non-compliance.
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Real-World Examples: Through practical examples and a hypothetical company setup, this episode provides a clear understanding of the filing process, beneficial ownership, and the responsibilities of entities under the CTA.
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Legal and Practical Challenges: Discuss the recent court rulings, ongoing legal challenges to the CTA, and the potential impact on businesses large and small. Discover how these developments might affect your compliance strategy.
Closing Thoughts: The Corporate Transparency Act represents a significant shift in how businesses must report and maintain transparency. Whether you’re a small business owner or manage multiple entities, staying informed and proactive about compliance is crucial. Join Gino and his guests as they offer invaluable insights, making a complex topic accessible and manageable for business owners nationwide.
Questions or Comments? Feel free to leave your questions or thoughts in the comments section below. Gino, Harry, and Paul are keen on providing further clarifications and engaging with your concerns on this critical topic.
Remember, the time to act is now. Delaying could lead to severe financial and legal consequences. Let’s navigate these changes together, ensuring your business remains compliant, secure, and successful.
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