NotaryCLT Signings™: Corporate Transparency Act Facilitator
What is the CTA?
The Corporate Transparency Act (CTA) is a U.S. federal law designed to combat illicit financial activities such as money laundering, terrorism financing, and tax evasion by requiring certain businesses to disclose their Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN). Effective January 1, 2024, the CTA mandates that most small business reporting entities—such as corporations, LLCs, and similar entities—submit detailed information about their beneficial owners, including their full name, date of birth, address, and identification number. This requirement impacts small businesses significantly, as they must now comply with additional reporting obligations, which aim to increase transparency and accountability in the financial system. Entities that fail to comply may face severe penalties, including fines and potential legal repercussions.
A facilitator can play a crucial role in helping reporting entities meet their BOI filing requirements. For businesses that lack the expertise or resources to navigate the complexities of CTA compliance, a facilitator provides guidance, ensuring the accurate collection and submission of ownership information to FinCEN. Facilitators are familiar with the regulatory framework and filing procedures, which helps reduce the risk of errors or omissions that could lead to penalties. Additionally, they can offer tailored solutions to streamline the reporting process, allowing small business owners to focus on their core operations while ensuring full compliance with the law.
Who needs to file?
A company may need to report beneficial ownership information to FinCEN if it is:
- a corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
- a foreign company that was registered to do business in any U.S. state or Indian tribe by such a filing.
What happens if a reporting company doesn’t file?**
A person who willfully violates beneficial ownership reporting requirements may be subject to civil penalties of up to $591 for each day that the violation continues, as well as criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.
**No liability/penalty issued for not filing so long as the requirement to file is not mandatory. **