Corporate Transparency Act
Small business owners, independent contractors and family business offices are being reminded that they may have to file a new report starting January 1, 2024, as part of the federal Corporate Transparency Act (CTA). While originally passed in 2021, the new law is designed to enhance transparency in entity structures and ownership to combat money laundering, tax fraud and other illicit activities. In short, it is intended to close loopholes that criminals have been using to hide their identities using shell companies.
Personal identifying information about who owns the business will now be required to be filed, or else impacted businesses could face fines, civil or criminal penalties and even jail time for non-compliance. Non-profit entities and public-reporting companies already providing information within the federal reporting system will not be affected by the new law.