The Corporate Transparency Act is on its way!
Small business heads-up – CTA filing!
Congress passed the Corporate Transparency Act (CTA) on January 1, 2021, and reporting begins on January 1, 2024.
What is the CTA?
Congress sees the Corporate Transparency Act as a way to help prevent money laundering, terrorist financing, corruption, and tax fraud. CTA requires any small business that has filed organization paperwork with their Secretary of State to file into a federal system.
Which small businesses are affected?
Any small business that has filed organization paperwork with their Secretary of State must file. This includes corporations (C and S), and single and multiple member LLCs. Sole proprietors and partnerships are not required to file.
Where will the reports be filed?
Reports will be filed with the Department of the Treasury’s Financial Crimes Enforcement Network, or FinCEN. FinCEN is currently building a system for CTA, called the Beneficial Ownership Secure System.
When do small businesses have to file?
Businesses already in existence on December 31, 2023 have a 12-month window to file. Businesses formed on January 1, 2024 and after have only 30 days to file from the date of formation. Please note: FinCEN will not accept filings until January 1, 2024.
What is the consequence for late filing? The penalties listed are severe: $500 a day for late filing, up to $10,000. There may be leniency during the beginning period of filing, although leniency is not specifically mentioned.
How do I find out more?
Check in with your NH SBDC advisor! SBDC will stay updated on this new reporting requirement.
Expect to see a lot of information rolled out about the CTA over the next six months.