Corporate Transparency Act (CTA): How to Prepare

by
January 9, 2023

Are you ready for the Corporate Transparency (CTA)? The CTA is a new law going into effect on January 1, 2024.

The CTA applies to millions of corporations and LLCs registered in the United States. The purpose of the CTA is to prevent, among other things, to cybercrime, terrorism and money laundering. Violation of this new law can result in monetary and criminal penalties. The US Treasury’s Financial Crimes Enforcement Network (FinCEN) will be responsible for enforcement of the CTA.

Here are some steps to consider now if you have a corporation or LLC:

1. Get Familiar with the CTA

 Understand and get familiar with the CTA requirements, including who is subject to the CTA and what has to be reported to FinCEN.

2. Assess Compliance Requirements

 Determine whether your corporation or LLC will be required to comply and report to the FinCEN and what needs to be done now in order to comply when the CTA goes into effect.

3. Update Company Records

 Review and update corporation and LLC governance documents to ensure they comply with the CTA. Identify and document all company “beneficial owners.” Have all “beneficial owners” sign and notarize affidavits warranting that they will provide all information and documents necessary to comply with the CTA. Failure to secure guarantees know can result in issues once the CTA goes into effect.

4. Implement a Compliance Program

 Develop and implement a compliance plan to ensure ongoing CTA compliance. This could include training relevant employees, initiating internal controls and processes and designating a compliance officer.

5. Ensure Timely Filing

 Ensure that the initial reports are filed when the CTA goes into effect. Ensure that FinCEN is notified when there are any changes to the corporation or LLC, or its “beneficial owners.”

 

The CTA is a new law and the specific requirements and implementation guidelines can change over time. Accordingly, stay tuned for any developments or updates.

LawInc is Here to Help You Comply with the CTA

If you need help with complying with the Corporate Transparency Act, LawInc is here to help.

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