A federal law took effect on January 1, 2024, that affects millions of small business owners across the United States. It’s called the Corporate Transparency Act (CTA), and if you own an LLC, corporation, or similar entity, it almost certainly applies to you. Non-compliance can cost $500 per day in civil penalties — and up to two years in federal prison. Here’s what you need to know.
What Is the Corporate Transparency Act?
The Corporate Transparency Act is a federal law that requires most U.S. businesses to report information about their real, human owners to the federal government. The law was passed as part of the National Defense Authorization Act in 2021 and went into effect on January 1, 2024. Existing businesses had until January 1, 2025, to comply.
The CTA’s stated purpose is to fight financial crimes — money laundering, tax evasion, and the creation of anonymous shell companies. For decades, a person could form an LLC in many states with almost no disclosure of who actually owned it. The CTA closes that loophole by creating a national registry of beneficial owners.
The agency that administers the CTA is the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.
Who Does the CTA Apply To?
The CTA applies to “reporting companies” — a broad category that captures the overwhelming majority of small businesses in the U.S. If your business was created by filing a document with a state agency, you are almost certainly a reporting company. This includes single-member and multi-member LLCs, C Corporations and S Corporations, limited partnerships and limited liability partnerships.
There are 23 exemption categories, but most apply to heavily regulated industries: publicly traded companies, banks, credit unions, insurance companies, registered investment advisers, and large operating companies (more than 20 employees, more than $5 million in U.S. revenues, and a physical U.S. office). If your business doesn’t fit one of those categories precisely, don’t assume you’re exempt.
What Are the Penalties for Non-Compliance?
- Civil penalty: $500 per day for each day the violation continues, up to $10,000 total
- Criminal penalty: Up to $10,000 in fines and up to two years in federal prison for willful non-compliance
FinCEN does not send warning letters before issuing penalties. There is no grace period once a deadline passes.
How to Get Compliant Quickly
Many small business owners find the FinCEN portal confusing and worry about making errors. A professional filing service removes that uncertainty. At BOIR Submission Center, Murat Akcay and his team review every detail before submission and back every filing with a 100% accuracy guarantee. You can file your BOI report in about two minutes of your own time.
The CTA is not optional, and the deadline has passed for most businesses. Visit boirsubmissioncenter.com and get compliant for a flat $99 fee.
BOIR Submission Center is not affiliated with FinCEN and does not provide legal, tax, or financial advice. This article is for informational purposes only.
