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The Corporate Transparency Act and How it Affects You

Ever feel overwhelmed by all the new regulations and laws thrown your way as a small business owner? You're not alone! Today, we're here to talk about the Corporate Transparency Act (CTA), a new law that went into effect this year and directly impacts many small businesses like yours.

This article provides a brief overview of the Corporate transparency act with links to learn more about specific aspects. The Green Bay Packers mentor protégé program will also be hosting a webinar March 15th with Director of the Law & Entrepreneurship Clinic at the University of Wisconsin Law School Emily Bucholz.

The Corporate Transparency Act is designed to combat crime on a broad scale but applies to small businesses acting as corporations, LLCs, or other entities created by filing with a secretary of state or a similar office. Businesses are required to fill out a BOI report unless they qualify for an exemption. The act was created in 2021 and implemented on January 1st of this year, and businesses have until January 1st, 2025, to comply with CTA's reporting standard.

  • Who needs to file? Most businesses registered as corporations, LLCs, or similar entities need to file a Beneficial Ownership Information (BOI) report by January 1st, 2025. There are some exemptions, primarily if already subject to substantial state or federal obligations, check this link below to see if you qualify.

  • What's in the BOI report? The BOI includes three sections: company information, beneficial owner information, and company applicant information if created on or after January 1st, 2024. It involves basic information about your company, the beneficial owners (individuals who ultimately own or control 25% or more of the business), and for companies formed after January 1st, 2024, information about the company applicant. 

  • What happens if I don't file? The penalty for not reporting in time is $500 per day if the violation is not continued or fixed and in extreme cases liability of up to $10,000 or 2 years in prison.

Small business owners take on a lot-everything is new and a challenge. The Small Business Survival Association (SBSA) is a free resource available to small businesses to help you sustain and build your business. We understand that small business owners don't have time to comb through all the news sources. Our blog posts biweekly on Tuesdays to provide you with short reads and resources to learn more, keeping you up-to-date on the business world.

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