Myth #1: The Corporate Transparency Act applies only to big businesses.
A reporting company (an entity that is required to submit certain information to the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN)) is a corporation, limited liability company (LLC), or other similar entity that was created by filing a document with the secretary of state or a similar office under the laws of a state, Indian tribe, or foreign country that is registered to do business within the United States.
Many business regulations apply only to large businesses, but the CTA specifically targets smaller entities. If you own a small business entity such as an LLC or family limited partnership you may be subject to this act unless your business falls within one of the stated exemptions, which are primarily applicable to industries that are already heavily regulated. Your business may also be exempt if it employs more than 20 full-time employees, filed a return showing more than $5 million in gross receipts or sales, and has a physical office located within the United States.
Myth #2: The information in the filings will be a matter of public record.
At present, FinCEN intends to collect the information and maintain the database for use by multiple government agencies. The information is deemed confidential, and FinCEN can only disclose the information upon receiving a valid request from certain state or federal agencies. Those who engage in the unauthorized disclosure of this information may be subject to penalties.
Question #1: What is the penalty if I do not comply with the Corporate Transparency Act?
According to the CTA, willful failure to comply or providing false or fraudulent information can result in a penalty of up to $500 per day, with a maximum penalty of $10,000 or imprisonment for up to two years, or both.
Question #2: What do I need to do if I move, and how long do I have?
If you are deemed to be a beneficial owner of a reporting company, you must submit an updated report that includes your new address within 30 days of the change in your address. A beneficial owner who changes their name must also submit an updated report within 30 days of the name change.
Have more questions? Schedule Your 15-Minute Phone Call Today!
This article is a service of Oakden Law, Ltd. Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Life & Legacy Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life & Legacy Planning Session and mention this article to find out how to get this $750 session at no charge.
The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.