Page 25 - BusinessWest September 2, 2024

The Corporate Transparency Act
Why Compliance Is Crucial for Business Owners
BY RUSSELL F. ANDERSON, ESQ. AND JAMES F. MARTIN, ESQ.
The Corporate Transparency Act (CTA) is a federal initiative to limit money laundering, tax evasion, and other illicit activities that took effect on Jan. 1, 2024. The CTA requires many businesses and their owners to reg- ister with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN).
Persons and companies that violate the CTA’s reporting requirements by failing to report at all or by providing false information to FinCEN may be subject to civil penalties of $500 for each day the violation continues and may also risk additional criminal fines and imprisonment.
The reporting requirements of the CTA mainly apply to
smaller entities that might otherwise slip under the federal
government’s radar. These companies are classified as hav-
ing a higher risk of abusing anti-money-laundering rules. While there have been legal challenges to the CTA, FinCEN has indicated that it will continue to enforce the law while these challenges are ongoing.
The CTA states that FinCEN must collect and maintain a federal database for beneficial ownership information (BOI) of companies. Unless there is an appli- cable exemption, all entities that are formed or registered to do business in the U.S. and have registered with the Massachusetts secretary of the Commonwealth’s office (or a similar office in a different state) need to register on the BOI database.
Exemptions
The CTA provides 23 different categories of exemptions, which include exemp- tions for entities that already make substantial public disclosures, such as finan- cial institutions and tax-exempt charities. Most notably, there is also a more gen-
JAMES MARTIN
“Persons and companies that violate the CTA’s reporting requirements by failing to report at all or by providing false informa- tion to FinCEN may be subject to civil pen- alties of $500 for each day the violation continues and may also risk additional criminal fines and imprisonment.”
RUSSELL ANDERSON
eral exemption for larger organizations that have a physical presence in the U.S., employ more than 20 full-time employees, and report more than $5 million in annual revenue to the IRS.
No filing will be required if an entity is exempt, but compliance with the criteria will be determined on a continual basis. For example, if an entity drops below the 20-employee threshold, a prompt filing will be required.
Reporting
FinCEN’s reporting portal can be found at boiefiling.fincen.gov. Entities that are not exempt from BOI reporting must provide the following information for each “beneficial owner” of a company:
full legal name, date of birth, current
residential or business address, and
Corporate
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Hit the Road with a New Set of Tires and Support a Good Cause.
For every set of four tires purchased between September 1st and October 31st, Balise will make a donation to Junior Achievement of Western Massachusetts.
For more information or to make a donation, visit baliseauto.com
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