If you own a small business or family office you could be required to report ownership details to the federal government… or face stiff penalties and possible jail time.
The Corporate Transparency Act went into effect on January 1, 2024, and it requires otherwise unregulated companies to report information about “beneficial” owners, those who own at least 25% of or exercise substantial control over the reporting company, to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). Failure to comply could result in fines of up to $10,000 and imprisonment.
This sounds scary, especially because this new law seems to target small businesses; however, its purpose is to close a loophole in corporate regulations that allows criminals to hide their identities using shell companies. The problem for you and many others is that this legislation may affect nearly every small business in the U.S., including independent contractors and limited liability companies commonly used by smaller businesses.
For more information, including what types of entities may be affected, click here.