The Corporate Transparency Act (CTA) enacted in 2021 aims to reduce money laundering by identifying shell companies used for illegal transactions. The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has been assigned the responsibility of carrying out this task. This new legislation requires small businesses with less than $5 million in annual sales and fewer than 20 employees to create a registry.
Millions of small businesses may soon be affected by the onerous reporting requirements and fines for noncompliance brought about by the CTA. This new legislation could have a significant impact on small businesses, as they may not have the resources to comply with the new reporting requirements or the financial means to pay the fines for noncompliance. It is important for small businesses to stay informed about these new regulations and their potential impact.
Small business owners need to closely monitor any changes and ensure that they are in compliance to avoid potential fines and penalties. The CTA is a broad effort to tighten money-laundering laws, but the implications for small businesses could be significant. As such, it is crucial that small businesses understand their obligations under this new legislation and take steps to comply with them.