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Business Owners and the Corporate Transparency Act (CTA)? Are You Prepared to Comply?

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A new federal law will take effect on January 1, 2024. This new law, the Corporate Transparency Act (CTA) shall impact many small business owners. It is an additional item of compliance for business owners who have LLCs, corporations, or other state-level registered entities. Here in Hawaii, if you registered your business entity with the DCCA BREG office, you may likely have to comply with CTA.

Compliance with CTA mandates the business owners disclose certain information to a federal agency. Many small business owners are unaware there is a reporting requirement. They may be unsure if CTA even applies to them.

Under the CTA, certain business owners will have to disclose beneficial ownership information, which may include owners who have “control” over their business entities. Business entities that must report are called “reporting companies.” Someone on behalf of a reporting company must gather the beneficial ownership information. They will then file and upload a beneficial ownership information report to the Financial Crimes Enforcement Network (FinCEN).

Small Business Owners May be Confused by CTA’s Forced Compliance

Business owners may be confused they must comply even if they’ve committed no crime. However, the CTA is designed to prevent money laundering. This is the reason for forcing these information disclosures. Business owners that fail to comply may be see fines and penalties, even jail time. There are some exemptions to complying with the law, but those mainly apply to regulated industries or large operating companies.

For business owners that are unsure of the need to comply with CTA it is best to speak to your business attorney and seek advice about what information needs to be prepared. Additionally, business entities with multiple owners may need update their governance documents, such as Operating Agreements for LLCs.

Please watch this webinar video as presented by our partner and Hawaii business attorney Ryan K. Hew on some of the basics of CTA.

You will find discussion of what compliance entails. It includes discussion on the exemptions, reporting company requirements, and the beneficial ownership information report.

We hope you find this post and the information useful. Check back for other business and compliance law, personal injury, and litigation information. Also follow us on social media for free educational content post.

As always, you should speak to an attorney regarding your compliance with a law if you are unsure.

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June 2021

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This website is owned and maintained by Hew & Bordenave, LLP (H&B), a law firm based in Honolulu, Hawaii, USA. This page outlines H&B’s PRIVACY POLICY with respect to your interaction with our website and how we handle your personal information if we receive it through your use of our website.

PRIVACY POLICY

This Privacy Policy applies to information collected online from users of this website. In this policy, you can learn what kind of information we collect, when and how we might use that information, how we protect the information, and the choices you have with respect to your personal information.

What personal information is collected through this website and how is it used?

We collect information about users from our web server logs and through cookies, where applicable. We do not share any of the information collected with others, unless we say so in this Privacy Policy, or when we believe in good faith that the law requires it. 

The information collected is anonymous and does not contain identifying information about the visitor, but may include information such as their city or region, how they arrived at our site – through direct search or a referral site, how much time they spent on a page, what pages they visited, etc.

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If you have any additional questions or concerns about this Privacy Policy, please contact us via the information provided on this website. If our information practices change in a significant way, we will post the policy changes here.

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As to data, contact information, and processing your Contact Us submission we will handle that according to this PRIVACY POLICY. If your submission requires further follow-up, we will contact you based on the contact information you submitted, usually within 2-3 business days.

Effective June 2021