The Corporate Transparency Act (CTA) is a recent federal legislation aimed at reducing money laundering. Enacted in 2021, the CTA assigns the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) with identifying shell companies used for illegal transactions. This new law 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.
Millions of small businesses may soon be affected by the onerous reporting requirements brought about by the CTA. The CTA requires the creation of a registry for businesses with less than $5 million in annual sales and fewer than 20 employees. Small business owners will need to closely monitor any changes and ensure that they are in compliance to avoid potential fines and penalties.
Overall, the CTA is a broad effort to tighten money-laundering laws, but the implications for small businesses could be significant. As such, it is important for small businesses to stay informed about these new regulations and their potential impact. By staying informed and taking necessary steps, small business owners can mitigate any negative consequences brought about by this new legislation.