Are you running a small business and want to avoid hefty fines or, even worse, jail time? Tune in to the latest episode of the Profitable Home Services Podcast, where I am diving into the brand new Corporate Transparency Act. Starting January 1st, 2024, this law will shake up the reporting requirements for corporations and LLCs, and you need to be ready. I will guide you through what you need to know to stay on the right side of the law and keep your business thriving.
In this episode you’ll learn:
- What is the new Corporate Transparency Act (CTA)
- How does it affect small business owners
- Find out the specific reporting requirements for your business entity (LLC vs SCorp etc
- Know the details required for reporting so that you can have them readyLearn where and how to file Corporate Transparency Act reports
- Ensure you know the timeframe you have to file within
- Understand the penalties for non-compliance so you can avoid costly fines and legal issues
- Stay informed so you can safeguard your business against future regulatory changes.
Key Moments:
- [00:00:03] The corporate transparency act
- [00:01:23] Implications of the act
- [00:03:06] Navigating the new requirements
- [00:04:19] Beneficial owners and reporting requirements
- [00:08:18] Filing process and penalties
- [00:15:39] Where to find more information
Understanding the Corporate Transparency Act (CTA)
Today, I’m diving into a topic that’s crucial for every small business owner to understand—the newly enacted Corporate Transparency Act (CTA). As of January 1st, 2024, this legislation is set to reshape the landscape of business ownership transparency in the United States.
The Impact of the CTA on Your Business
The CTA is a game-changer, especially designed to prevent the misuse of shell companies and to shed light on the actual individuals behind corporate entities. This act is not just for new corporations and LLCs formed in 2024; it also applies retroactively to all existing businesses before January 1st, 2024. So, whether you’re starting a new venture or have been in the game for years, the CTA affects you.
Compliance is Key: Avoiding Hefty Penalties
As a business owner, you might be wondering, “What does this mean for me?” Well, the CTA mandates that businesses report specific information about their beneficial owners. A beneficial owner is someone who either owns at least 25% of the company or has substantial control over it. You’ll need to disclose their full legal name, date of birth, residential address, and an identification number. A digital copy of an identifying document is also required.
Failure to comply with these requirements can lead to severe consequences. We’re talking about civil penalties of $500 per day and criminal fines up to $10,000. And in the most serious cases, non-compliance could even result in imprisonment for up to two years. It’s not worth the risk, so understanding and adhering to the CTA is important.
Keep Your Reporting Current: What You Need to Do
For new entities, the process is straightforward: report the required information upon formation. However, for existing businesses, it’s essential to keep your reported information up to date. Any changes in ownership or control must be reported in a timely manner to avoid penalties.
Where to File and Find More Information
You might be feeling overwhelmed, but don’t worry—I’ve got you covered. The place to file these reports and find comprehensive FAQs is the Financial Crimes Enforcement Network (FinCEN) website. It’s a treasure trove of information that can help you stay on top of your reporting duties.
Leveraging Resources to Stay Compliant and Profitable
I cannot stress enough the importance of addressing the CTA requirements for your business. It’s not just about avoiding penalties; it’s about operating with integrity and transparency in today’s market. And remember, I’m here to help you navigate these waters. My coaching programs are designed to not only ensure compliance but also to uncover hidden profit leaks and drive your bottom-line profits up.
NOTE – At the time that this episode is live, this is still ongoing, and is being challenged in the court systems so expect further updates once we hear more.
Resources: https://www.fincen.gov/boi
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