The Government Wants To Know Your Business: The Corporate Transparency Act

If you are a business owner, the US government would like to get to know your business.

I wanted to take a moment this morning to make you aware of an upcoming broad sweeping requirement that will most likely begin in 2022. The Corporate Transparency Act (CTA) is a historic new law (1/1/2021 with a delayed start) impacting millions of America's existing small corporations and LLCs and other business entities registered to do business in the United States. The CTA also applies to newly formed entities and requires disclosure of personal ownership information to the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN).  
The proposed regulations are still in the comment period, but the comment period ends in February and then Treasury officials will most likely begin to prepare the forms and reporting infrastructure and set the reporting due dates. Willful violations are subject to substantial monetary ($500/day up to $10,000) and criminal penalties, including prison time. Accordingly, you do not want to wait to comply once the reporting process is finalized. 
The purpose of the Corporate Transparency Act is to improve U.S. national security by helping to prevent the misuse of corporations and LLCs for money laundering, cyber-crime, fraud, tax evasion, human and drug trafficking, proliferation of weapons of mass destruction and the financing of terrorism. This new legislation marks the first time in history the federal government will maintain a private government database of company ownership for law enforcement purposes. 
Items that will need to be reported include: 

• “Beneficial (i.e. True) Ownership” and/or “Substantial Control” Information – This includes owners’ full names (and officers’), birthdates, current residential and business addresses and an ID number (valid driver’s license, passport, or government identification) 
• Certain Business Information – Business Name, EIN, Addresses, etc. 
• Certain Agent Information – Information about the registered agent and those who helped form the entity. 

There are a few exceptions about which entities will not need to file under the CTA but until the regulations are final, please plan on needing to file. 
It is currently proposed to file an initial filing and one upon any changes to the information included in the initial filing. 
To prepare for compliance, if any uncertainty exists as to the beneficial ownership of a company you are a part of, immediately start identifying who the owners are and gather the needed information to avoid significant civil and criminal penalties. 

Please keep this one on your radar. I will update as more information becomes available.