As the year draws to a close, businesses across Florida must review their compliance obligations under the Corporate Transparency Act (CTA). If you’re a business owner, understanding the CTA’s requirements is essential to avoid penalties and ensure full compliance with beneficial ownership reporting. This end-of-year refresher will revisit the key aspects of the CTA, remind you of upcoming deadlines, and clarify the steps you need to take to meet all filing requirements.

Whether you’re a small business owner or an experienced corporate officer, understanding the CTA’s requirements can be challenging. As Florida business and corporate attorneys, we aim to simplify this process and help you keep your business on the right track.

What Is the Corporate Transparency Act?

The Corporate Transparency Act (CTA), enacted in 2021, aims to combat illegal activities like money laundering and terrorism financing by increasing transparency around the individuals who own or control certain business entities. The CTA requires companies to report key information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). This data will then be stored in a secure database, accessible only to certain government authorities and financial institutions conducting customer due diligence.

The CTA’s requirements are straightforward for most businesses, but failing to meet them can result in severe penalties. Ensuring your company is fully compliant can protect you from unnecessary fines and legal issues. If you’re unsure whether the CTA applies to your business, a Florida business and corporate attorney can provide the clarity and guidance you need.

Who Needs to Report Under the Corporate Transparency Act?

The CTA applies to a wide range of entities, but not every business must report. Here’s a breakdown of who must comply and who is exempt:

Reporting Entities

The CTA primarily targets small and medium-sized businesses, especially those that may not already be subject to extensive regulatory oversight. If your company is a corporation, limited liability company (LLC), or any similar entity formed under state law, you’ll likely need to comply with the CTA’s reporting requirements.

Exempt Entities

Some entities are exempt from the CTA’s requirements, primarily because they are already subject to substantial regulatory oversight. These include:

• Publicly traded companies
• Banks and credit unions
• Investment companies and advisers
• Insurance companies
• Certain tax-exempt entities, like charities
• Large operating companies (with 20 or more employees, a physical presence in the U.S., and over $5 million in annual revenue)

If your business falls into any of these categories, you may be exempt from the reporting requirements. However, determining whether your company qualifies for an exemption can be tricky. A Florida business and corporate attorney can review your unique situation and help determine if you must report under the CTA.

What Information Must Be Reported?

If your business falls under the CTA’s purview, you will need to report specific information about the company’s “beneficial owners” and “company applicants.”

Beneficial Owners

A beneficial owner is any individual who directly or indirectly owns or controls at least 25% of the company or has substantial control over the company’s operations. This includes those who:

• Hold voting power or ownership interests
• Exercise significant influence over key management decisions
• Own large portions of the company, whether directly or indirectly

For each beneficial owner, you must provide FinCEN with the following information:

• Full legal name
• Date of birth
• Residential or business address
• Unique identification number (such as a driver’s license or passport number)

Company Applicants

The CTA also requires information about the company applicant, defined as the individual who filed the paperwork to form the company. While existing businesses will not need to report company applicants, any newly started businesses after January 1, 2024, must provide this information.

Each piece of information provided must be accurate and current, and it’s essential to double-check the details before submission. Reporting incorrect or incomplete information can lead to compliance issues and potential penalties.

Key Deadlines to Remember

The CTA sets clear deadlines for compliance, which vary based on when your business was formed.

• Existing Entities: If your company was formed before January 1, 2024, you must file your beneficial ownership report with FinCEN by January 1, 2025.
• New Entities: Businesses formed after January 1, 2024, must file their initial report within 90 days of formation if filed in 2024, and 30 days of formation if filed after 2024..
• Changes to Ownership or Information: If there are changes in beneficial ownership or other reported information, you have 30 days from the date of the change to update your report with FinCEN.

Meeting these deadlines is essential. Late or missed filings can lead to substantial fines or, in extreme cases, criminal charges. If you’re unsure whether your business is on track to meet these deadlines, a Florida business and corporate attorney can help you create a timeline for compliance.

How to File a Beneficial Ownership Report

The process of filing a beneficial ownership report with FinCEN is straightforward, but it requires accuracy and attention to detail. Here’s a step-by-step guide to help you get it right:

• Determine Reporting Obligation: First, confirm whether your business is required to report. A Florida business and corporate attorney can help you determine your specific obligations.
• Gather Information: Collect the necessary information about each beneficial owner and, if applicable, the company applicant. Ensure all details are accurate, as errors can lead to fines and rejections.
• File with FinCEN: Once all information is compiled, file your report through FinCEN’s secure online portal. You will need to create an account and follow the prompts to submit your information.
• Monitor for Changes: After filing, monitor any changes in ownership or control, as these must be reported within 30 days. Keeping an updated record can streamline any future filings.
• Seek Guidance as Needed: If you encounter any issues or have questions during the filing process, consider consulting a Florida business and corporate attorney. Legal guidance can make a significant difference in preventing common reporting errors and ensuring compliance.

Avoiding Penalties for Non-Compliance

The penalties for non-compliance with the CTA are strict and can be costly. Businesses that fail to report, submit inaccurate information, or miss the reporting deadlines can face fines of up to $500 per day, with a maximum penalty of $10,000. In severe cases, individuals responsible for filing could face criminal charges, including imprisonment.

To avoid penalties:

• Double-Check Your Report: Verify all details for accuracy before submitting your beneficial ownership report to FinCEN.
• Meet Deadlines: Be proactive in meeting all CTA deadlines. Mark them on your calendar and set reminders.
• Update as Needed: Any changes in ownership or control must be reported within 30 days. Failing to update information can result in penalties, even if you initially complied.

By taking these steps and staying informed, you can keep your business fully compliant and avoid the costly consequences of non-compliance.

Why Expert Guidance from a Florida Business and Corporate Attorney Matters

Navigating the complexities of the Corporate Transparency Act can be challenging, especially if you’re managing a small or mid-sized business. Reporting obligations, exemptions, deadlines, and penalties add layers of legal complexity that are often difficult to interpret without professional guidance. Working with a skilled Florida business and corporate attorney can provide peace of mind and ensure you’re meeting every CTA requirement.

Experienced attorneys can help you verify whether the CTA applies to your business, determine who qualifies as a beneficial owner, gather and review the necessary information for accuracy, and ensure timely filings. They’ll also be there to answer questions, offer ongoing compliance support, and update reports as necessary.

Engaging legal counsel not only helps your business remain compliant but also prevents costly mistakes that could have long-term financial and legal consequences. A knowledgeable attorney can simplify the process and give you the tools you need to handle beneficial ownership reporting with confidence.

Contact Battaglia, Ross, Dicus & McQuaid, P.A. for a Free Consultation

If you’re unsure about your company’s compliance with the Corporate Transparency Act, don’t wait until the last minute. Contact Battaglia, Ross, Dicus & McQuaid, P.A. for a free consultation. Our team of dedicated Florida business and corporate attorneys has decades of experience guiding businesses through complex regulatory landscapes, including CTA compliance.

Founded with a commitment to excellence and backed by a proven track record, our firm has been a trusted legal partner to businesses across Florida for years. Our attorneys combine deep knowledge of corporate law with a practical approach to deliver solutions tailored to your unique needs. We understand the importance of timely compliance and can assist you in meeting all CTA requirements efficiently and effectively.

Reach out today to learn more about how we can help protect your business. Let us handle the complexities of beneficial ownership reporting, so you can focus on what you do best—running your business.

Award-Winning Attorneys at Battaglia, Ross, Dicus & McQuaid, P.A.

We are the law firm that you call when you want the best attorneys at a fair and reasonable price. When you walk into court with one of our attorneys by your side, you will be treated differently. Our lawyers have spent their careers developing connections and insights that will help your case.

For more information please contact us at Battaglia, Ross, Dicus & McQuaid, P.A. to schedule a free consultation with an attorney today. We have three convenient locations in Pinellas County and Hillsborough County to better serve you.

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