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  • Molly Shoemaker

A Quick CTA Scan

The CTA.  The BOIR.  It’s not just alphabet soup, but a real piece of legislation that took effect on January 1st of this year that you need to be aware of.


It’s called the Corporate Transparency Act and it brings about a new requirement called Beneficial Owner Information Reporting.  What it means to you is that there is a little more paperwork that comes from being a business owner.  Specifically, you are required to identify all people who can financially benefit from your business.  These people are referred to as “Beneficial Owners” and they do not have to hold any official ownership in the business.  Instead, positions such as CEO, CFO, or even some general managers would qualify under this definition.  


Why all the fuss?  The CTA was created in an attempt to uncover shell businesses used for illicit and illegal purposes, specifically money laundering.  Because of that, the process cares more about the people associated with the business than the actual business itself.  Filing requires identifying documents for those determined to be beneficial owners of the business.  


Reporting for this has two deadlines.  For companies that were formed since January 1, 2024, you must file within 90 days of forming the business this year.  That deadline moves to 30 days in subsequent years.  For business formed prior to 2024, you have until the end of the year to file.  Also note that you must file for all changes within 30 days of that change occurring.  This means transferring part or full ownership of the business or simply hiring a new CFO.  Most important to know is that failure to file can result in a $500 per day fine, indefinitely.  That’s per day, not a one-time fee!  


There are some situations in which a company is exempt from reporting.  The most common of which are for larger businesses and non-profit organizations and financial institutions that fall under additional regulations.  We do not expect many businesses in the home inspection industry to be exempt.


To make things even more complicated, there has been some opposition to this legislation, which is currently working its way through the legal system.  However, nothing has officially been postponed at this time.  So, while you can put off worrying about this to see how everything shakes out  if your business started prior to 2024, we do not recommend that you wait to file if you have started a new business. 


If this pertains to you and your new business, RTC can help you with the filing process.  Please reach out to info@rtcaccounting.com or your main contact for more information.

Because this is a convoluted process, there is a lot of documentation to sift through.  You’ll find links to a number of helpful resources at the bottom of this article.  And as always, you can reach out to us with questions.  


If you are receiving this newsletter directly, we will be keeping you updated as new information is released.  If this message was forwarded to you and you’d like to be added to the list, click here.  We promise never to share your information or send you spam.


Helpful Links:


Small Business Compliance Guide

 

Frequently Asked Questions about CTA

 

Quick Reference


Sign up for CTA Filing with RTC


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