The Corporate Transparency Act (CTA), enacted in 2021, is a new federal legislation aimed at reducing money laundering by assigning the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) with identifying shell companies used for illegal transactions. The CTA requires the creation of a registry for businesses with less than $5 million in annual sales and fewer than 20 employees.
Small businesses may soon be affected by the onerous reporting requirements and fines for noncompliance brought about by the CTA. Millions of small businesses could be impacted by this new legislation, which could have a significant impact on their operations. Small business owners will need to closely monitor any changes and ensure that they are in compliance to avoid potential fines and penalties.
The CTA is a broad effort to tighten money-laundering laws, but its implications for small businesses could be significant. Small businesses often have limited resources and may not have the financial means to comply with the new reporting requirements or pay the fines for noncompliance. It is important for small business owners to stay informed about these new regulations and their potential impact on their operations. The CTA is another example of how small businesses can be disproportionately affected by federal regulation.