The Corporate Transparency Act (or CTA) is a new law that very few people are talking about. It took effect on January 1st of this year, and it requires most small businesses to report personal, non-economic information to the Financial Crimes Enforcement Network (or FinCEN).
And if you don’t report this information, you can face very steep consequences.
What Are the Penalties for Not Filing?
If you don’t submit these reports to FinCEN, you can face penalties that include $10,000 in fines and/or 2 years in jail.
And even with these significant penalties, there has been no serious effort to educate people about the CTA. In fact, many business owners and real estate investors have been left in the dark.
The easiest way to avoid these penalties is to submit these FinCEN reports as soon as possible. And the timing to submit these reports depends upon when the entity was formed.
When to File the FinCEN Reports
So, when exactly are these reports due? The timing to file them depends upon when your company was formed.
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- If your reporting company was formed before January 1st, 2024, you have one year (or until December 31st, 2024) to report your information to FinCEN.
- If your reporting company was formed between January 1st, 2024 and December 31st, 2024, you have 90 days to report your information to FinCEN.
- If your reporting company was formed after January 1st, 2025, you only have 30 days to report your information to FinCEN.
- When your reporting company has a change in ownership, a new mailing address, or someone discovers an error in a previous report, you only have 30 days to file the corrected reports.
It is best practice to get these reports in as soon as possible. In fact, if you formed a company in the first few months of 2024, these reports have already come due.
And if you don’t want to submit these reports, we here at Corporate Direct can report this information for you. For more information on the CTA and its reporting requirements, you can schedule a free 15-minute consultation with one of our incorporating specialists by clicking the link here: https://corporatedirect.com/schedule/
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