Are you an LLC owner? There are new law changes that you need to know about in 2024. (Transcript is below.)
Welcome back to the Elder Law Hour. I'd like to end this show today talking about a new law that has come into play for 2024. As of January 1st, 2024, millions of small businesses will need to file electronic reports to comply with the Corporate Transparency Act.
So if you are incorporated or had your LLC before now, you have the entire year to follow the federal government's new requirements. But if you are planning to start a business this year, then you're only going to have 90 days to actually, report this information. So what is this? What is this new law?
It's a Corporate Transparency Act. Congress passed this act in 2021 as part of the National Defense Authorization Act. And the purpose of it is really to fight money laundering and tax fraud and the funding of terrorism through shell corporations. Okay. So. It may not seem like it has a lot to do with you if you are a small business owner.
However, the Treasury Department's Financial Crimes Enforcement Network published rules in 2022 about which types of businesses must file. CTA, Corporate Transparency Act, reports. So what is this? If you, basically, if you are a small business owner and you own a corporation or you own an LLC, you are going to be required to visit that website or have a provider do this for you.
Keep in mind that, attorneys are not obligated to do this for you. So if you have an attorney that you're working with for, business planning or planning, They can't do this for you. You're going to have to provide information that they don't have on hand. And that information is going to be the business address, the tax identification number, the individual names of any of the owners and people that have substantial control over the business.
Their addresses and birth dates. And then you're also going to have to provide an image of yourself, like a driver's license, or a passport photo. So keep in mind, this will be, this is something that all current business owners are going to have to comply with this year. Any new businesses created or registered in 2024 will have 90 days to report their ownership information.
So this is. going to affect most companies. It's, it's going to be required for corporations, for LLCs, for limited liability partnerships and for business trust. So, who needs to worry about this? If you are an owner of a business or a beneficial owner, and that's anyone who owns at least 25 percent of the company.
Is going to, or exerts what they are calling substantial control over it. Okay. So if you think you fall into that definition, beware that this is something that is going to affect you this year. You're going to need to file that or face the penalty. And the penalties for failure to file include civil fines of 500 per day.
And criminal fines of up to 10, 000 and two years in prison. So you certainly don't want to take any chances with that. Again, this is called the Corporate Transparency Act. It is really meant to deter any type of money laundering, tax fraud, and the funding of terrorism. But this Is really a big, a big spread.
It's going to affect all business. Most, business owners will need to file this information with the agency. So, make sure you get that done. And of course you can always talk to your attorney if you need more information about that. So, Thank you so much for tuning into the show today. This is Emily Hicks.
You've been listening to the elder law hour and we will catch you next week.
