A major component of the National Public Records Research Association’s (NPRRA) Annual Conference this year in Kentucky was specific coverage of the Corporate Transparency Act. New legislation will go into effect on January 1, 2024 which will greatly impact an estimated 32.6 million small to medium sized businesses in specific unregulated industries in the first year alone. This does not include the additional estimated 5 million businesses per year over the course of the next ten years that will be impacted by this legislation. Service companies that provide Registered Agent services such as Professional Filing & Search Services, Inc. (PFSS) will be impacted by this new legislation.
The U.S. Treasury Department established the Financial Crimes Enforcement Network (FinCEN) in 1990 to support law enforcement as they fight against money laundering and other financial crimes. Businesses who are not exempt from legislation will be required to report particular information about the clients they service to FinCEN; such information includes legal and trade names, address, jurisdiction the business was formed in, taxpayer identification number, and beneficial ownership information including sensitive and pertinent identifying information. All companies can simplify the process by applying for a FinCEN identification number. Violations of this newly introduced legislation are steep with civil penalties of not more than $500 per day and prison sentences of not more than two years, or both.
PFSS is actively engaged in understanding the rules and regulations of this new legislation; we are closely monitoring any updates. If you have any questions or concerns, please don’t hesitate to reach out to us and we’ll do our best to help you navigate this process.
If this legislation is slightly confusing, you are not alone. If you are not sure where your company’s responsibility lies, you can access FinCEN’s beneficial ownership reporting page here. FinCEN has also established a frequently asked questions page which can be viewed here. If you would like to share information about this legislation that you have found helpful, please do so in the comments.