The Corporate Transparency Act (CTA) enacted in 2021 is aimed at reducing money laundering by assigning the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) with identifying shell companies used for illegal transactions. This new legislation could have a significant impact on small businesses, as they may not have the resources to comply with the new reporting requirements or the financial means to pay the fines for noncompliance. Millions of small businesses may soon be affected by these onerous requirements.
Small business owners need to closely monitor any changes and ensure that they are in compliance to avoid potential fines and penalties. The CTA is a broad effort to tighten money-laundering laws, but its implications for small businesses could be significant. This new legislation is just another example of how small businesses can be disproportionately affected by federal regulation. It is important for small businesses to stay informed about these new regulations and their potential impact.