Understanding the Corporate Transparency Act (CTA)
Businesses cannot hide behind anonymity anymore. There’s a new law that’s going to kick in about a month that requires all businesses to fully disclose who the owners are. You can’t have hidden owners of a business; it doesn’t matter what state you’re in. Some states had very obscure reporting where you didn’t have to show who owned a business, but the Corporate Transparency Act (CTA) that was voted on a year or so ago now requires all businesses to report who the owners are.
Benefits for Consumers and Businesses
This is going to be very important for businesses to know because, as you can see in the article, 90% of businesses don’t even know this. But even if you’re a consumer, it’s good to know that you can find out who’s behind a business if you’ve been defrauded by a company, if you have some company doing something sketchy with a contract, or that is not performing as they should, or that basically ripped you off. You now know who’s behind it. They can’t hide behind the corporate veil. This is important when we do investigations; a lot of times, part of the problem is finding out who the owners are.
Legal Ramifications for Non-Compliance
Now, once you find out the owner, you can do asset searches and background checks on them, but finding out the owner now has become much easier. So if that company is trying to hide behind just the company name, you can’t do it. Plus, it requires that not just the owners, but if there’s any board members, senior executive employees, attorneys, or other executive staff, they also have to be reported. There’s a huge penalty for it if you don’t do it. It’s $10,000 for non-compliance. There’s even jail time that could kick in.
Empowering consumers and businesses alike
So if you’re a consumer or a business that has had a difficult time identifying who’s behind the fraud or who’s behind the scam, this now works in your favor. It still may take a little bit of research to actually get the information, but it can’t be withheld by the company, and this works in your favor.
