By January 2025, many small businesses, including Notary businesses, must submit information to the government under a new federal law or face severe fines and penalties. To determine if your business is affected and how to comply, read our FAQ on the Corporate Transparency Act below.
What is the CTA and who does it affect?
The Corporate Transparency Act (CTA), which came into effect in 2021, is designed to enhance transparency regarding company ownership to combat financial crimes. Notaries operating their businesses under specific business structures need to be mindful of new filing requirements that could impact their operations. The reporting obligations commenced this year, with deadlines in January 2025.
Under the CTA, certain businesses must disclose details about their "beneficial owners" to the Financial Crimes Enforcement Network (FinCEN). A beneficial owner is an individual with a significant stake in the company or control over its decisions.
Are Notaries obligated to report business information under the CTA?
It varies. Notaries functioning as sole proprietorships are likely unaffected unless they have filed documentation with a state office to establish their business. However, Notaries operating as Limited Liability Companies (LLCs), corporations, or any other business structure necessitating state filing are classified as reporting entities and must submit a Beneficial Ownership Information (BOI) report to FinCEN.
What details are necessary to file for my Notary business?
The BOI report mandates information about the reporting company, its beneficial owners, and any company applicants (if applicable), such as names, addresses, birthdates, and identification numbers for each individual.
A "company applicant" refers to the individual who lodged the document that established or registered the company, or the person responsible for directing or controlling the filing of documents that initially established or registered the business.
What are the filing deadlines?
Deadlines vary based on the business establishment date:
Businesses founded before January 1, 2024, have until January 1, 2025, to submit their initial BOI report.
Businesses established in 2024 must file within 90 days of formation notification.
Businesses founded on or after January 1, 2025, have 30 days from formation notification to file.
What penalties apply to non-compliant businesses?
Failure to adhere to the CTA can lead to substantial fines. Willful violation may result in civil penalties of up to $591 per day (as of April 18, 2024) and potential criminal penalties of up to two years' imprisonment and a $10,000 fine.
What steps should I take if uncertain about my Notary business's CTA filing obligations?
Notaries unsure of their filing requirements should seek advice from an accountant or lawyer to ascertain if their business must file a report under the CTA. There is no penalty for submitting a BOI report if unnecessary, so filing as a precaution is harmless. Remember: The deadline for companies established before 2024 is approaching. Notaries operating as reporting entities should ensure compliance with the CTA.
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