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  • Bryan Granda

Is Your Business Ready for the Corporate Transparency Act?

The Corporate Transparency Act (CTA) represents a significant shift in the regulatory landscape for businesses and organizations both in the U.S. and abroad. Effective January 1, 2024, this landmark legislation requires many entities to report detailed information about their structure and beneficial owners to the federal government. Understanding the implications of the CTA is crucial for ensuring compliance and avoiding potential legal pitfalls.

What is the Corporate Transparency Act?

The CTA aims to increase corporate transparency and combat illegal activities such as money laundering, fraud, and corruption. By mandating disclosure of beneficial ownership, the law seeks to provide authorities with the necessary tools to identify and prosecute those who misuse corporate structures for illicit purposes.

Who Needs to Comply?

The CTA affects a broad range of entities, including:

●     Corporations

●     Limited Liability Companies (LLCs)

●     Other similar entities

Organizations operating within the US, both domestic and foreign, must comply. However, there are some exemptions. Large companies with more than 20 full-time employees, over $5 million in gross receipts or sales, and a physical office within the U.S. may be exempt from certain reporting requirements.

Key Requirements of the CTA

  1. Disclosure of Beneficial Owners: Businesses must report information about their beneficial owners, including full legal name, date of birth, current residential or business address, and an identification number from an acceptable document (like a driver’s license or passport).

  1. Reporting Deadlines: Entities created or registered before January 1, 2024, have until January 1, 2025, to submit their initial reports. Those formed or registered after January 1, 2025, must report within 30 days of formation or registration.

  1. Updates and Corrections: Businesses must update their reports within 30 days of any change in their beneficial ownership information. This guarantees that the information is up to date and 100% accurate.

Implications for Businesses

The CTA introduces several critical changes that businesses need to be aware of:

●     Increased Administrative Burden: The new reporting requirements add a layer of administrative responsibility for businesses. Ensuring accurate and timely reporting is essential to avoid penalties.

●     Penalties for Non-Compliance: Failure to comply with the CTA can result in significant fines and legal consequences. Civil penalties can reach up to $500 per day of non-compliance, and criminal penalties may include imprisonment for individuals who willfully provide false or fraudulent information.

●     Enhanced Transparency: The CTA raises concerns regarding data security and privacy even as it seeks to encourage transparency and prevent illicit activities. Businesses must ensure that their reporting processes are secure and that sensitive information is protected.

Steps to Ensure Compliance

  1. Understand the Requirements: Familiarize yourself with the specifics of the CTA and how they apply to your business. Consult with legal experts if necessary to ensure full understanding.

  1. Gather Necessary Information: Compile the required information about your beneficial owners. Ensure that the data is accurate and up-to-date.

  1. Implement Reporting Processes: Establish processes for collecting, verifying, and reporting beneficial ownership information. Designate a compliance officer or team to oversee these efforts.

  1. Stay Updated: Monitor for any updates or changes to the CTA and adjust your compliance strategies accordingly.


The Corporate Transparency Act marks a significant change in business reporting requirements, aiming to enhance corporate transparency and combat financial crimes. While the CTA introduces new responsibilities and potential challenges for businesses, understanding and complying with the law is essential to avoid penalties and ensure smooth operations.

For businesses in Florida navigating the complexities of the CTA, Solomon Cooperman Recondo & Weiss offers expert legal guidance in business litigation law. Our team is dedicated to helping you understand the implications of the CTA and ensuring your business remains compliant with all regulatory requirements. Contact us today to learn more about how we can support your business in this new regulatory landscape.


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