Dallas-area Business Regulatory Compliance Attorney And Counselor

The Corporate Transparency Act (CTA), part of the National Defense Authorization Act for Fiscal Year 2021, mandates that certain entities file Beneficial Ownership Information Reports (BOIR) with the Financial Crimes Enforcement Network (FinCEN), a law enforcement agency of the U.S. Department of Treasury. Effective January 1, 2024, this requirement applies to most small and medium-sized businesses in America that are structured under state or tribal business organization laws, including, but not limited to, limited liability companies, corporations, and partnerships.

Does the CTA Affect Your Business?

If you operate a small or medium-sized business, the CTA may apply to you. In its final implementation regulations, FinCEN has identified two categories of individuals who must file regulatory reports:

• the beneficial owners of the impacted entity, and
• individuals who have filed an application with specified governmental authorities to create the impacted entity

The CTA also applies to individuals exercising substantial control of the impacted entity, including, but not limited to, Presidents, Vice Presidents, Comptrollers, and General Counsels.

Reporting Deadlines

Impacted small and medium-sized businesses established at any time in 2024 must file their initial BOI report with FinCEN on or before 90 days after their creation under any state or tribal business structuring code. Starting January 1, 2025, this deadline will shorten to 30 days.

Impacted small and medium-sized businesses structured before January 1, 2024, have until January 1, 2025, to file their initial BOI report.

Initial BOI reports must be updated within 30 days of any changes in the initial BOI, such as expiration of identification documents or updates to address information.

Potential Risks of Failure to Comply

Problems may arise for small and medium-sized businesses, their owners, their advisors, controllers, and others in several ways:

• Penalties: Small and medium-sized businesses who fail to file BOI reports or file fraudulent BOI reports may be subject to civil fines of up to $500 per day. Businesses who fail to comply with these requirements may also be subject to potential imprisonment of up to two years upon prosecution and conviction and a fine of up to $10,000.
• Investigations: Small and medium-sized businesses and individuals associated with them could be investigated as actors engaged in money laundering, terrorist financing, financial corruption, tax fraud or other illicit criminal activity under international, federal, state and local law.
• Liability for Advisors: Those who advise small and medium-sized businesses in their creation under state and tribal structuring laws and those filing BOI with FinCEN on their behalf could be charged with aiding and abetting bad actors in obfuscating their illicit activities by use of shell and front companies.

Dallas-Area Business Regulatory Compliance Attorney & Counselor

Navigating the complexities of the CTA can be challenging and potentially dangerous, exposing you to legal jeopardy. As a Dallas-area business regulatory compliance attorney and counselor law firm, Attorney Coleman Jackson, P.C. can assist you with determining whether the CTA applies to your business, help you to timely and accurately file your BOI reports in accordance with your obligations under law, and provide you guidance on maintaining ongoing compliance with your obligations under the Corporate Transparency Act.