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Navigating the Corporate Transparency Act: Compliance Advisory for Small Businesses

09/09/2025

The Corporate Transparency Act (CTA) is a new regulation that impacts small businesses across the U.S., requiring many companies to disclose ownership information to the federal government. This law, which took effect on January 1, 2024, is designed to combat financial crimes such as money laundering and fraud by increasing business transparency.

For small business owners, understanding and complying with the CTA is crucial to avoiding penalties and ensuring smooth operations. Here’s what you need to know about the requirements and how to stay compliant.

Who Must Comply with the Corporate Transparency Act?

The CTA applies to most small businesses operating in the U.S., including LLCs, corporations, and similar entities. Companies that are already subject to significant federal regulation, such as banks or publicly traded companies, are typically exempt.

If your business is privately owned and registered with a state, there’s a good chance you need to file a Beneficial Ownership Information (BOI) Report with the Financial Crimes Enforcement Network (FinCEN).

What Information Must Be Reported?

The BOI Report requires businesses to disclose details about their beneficial owners, which are individuals who:

  • Own 25% or more of the company, or
  • Exercise substantial control over the company’s decisions.

The report includes the following information for each beneficial owner:

  • Full legal name
  • Date of birth
  • Current residential address
  • Identification number (from a passport or driver’s license)

Newly formed businesses will also need to report information about the individuals who helped create the entity (such as attorneys or accountants who filed the incorporation paperwork).

Filing Deadlines and Requirements

The deadline for reporting depends on when your business was established:

  • Existing businesses (formed before Jan. 1, 2024): Must file the BOI Report by Jan. 1, 2025.
  • New businesses (formed after Jan. 1, 2024): Must file within 90 days of registration.

Any changes to ownership or key information must be updated with FinCEN within 30 days to remain compliant.

Penalties for Non-Compliance

Failing to comply with the CTA can result in severe penalties, including:

  • Fines of up to $500 per day for ongoing violations
  • Criminal penalties, including potential jail time for willful non-compliance

Given the high stakes, small business owners should take proactive steps to ensure accurate and timely filing.

How Small Businesses Can Stay Compliant

  1. Determine if Your Business Must File
    Review your business structure and ownership to confirm whether the CTA applies. Most LLCs and corporations will need to report.
  2. Gather the Required Information
    Identify all beneficial owners and collect their required details well before the deadline to avoid last-minute issues.
  3. File the BOI Report with FinCEN
    Reports must be submitted electronically through FinCEN’s online system. Keeping a copy for your records ensures compliance if updates are needed later.
  4. Monitor and Update Information
    Any changes in ownership or leadership should be reported within 30 days to stay compliant and avoid fines.
  5. Work with a Compliance Advisor
    Given the complexity of the new requirements, consulting with a bookkeeping and advisory firm like Perpetual CPA LLP can help ensure proper filing and prevent costly mistakes.

Final Thoughts: Proactive Compliance is Key

The Corporate Transparency Act introduces new compliance responsibilities for small business owners, making it essential to stay informed and act early. By understanding the requirements, gathering necessary information, and filing on time, businesses can avoid penalties and maintain smooth operations.

For expert guidance on CTA compliance, bookkeeping, and financial advisory services, visit www.perpetualcpa.com.

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