You aren’t known to be fans of jumping through hoops and wading through red tape. Unfortunately, a new law calling for just that is going largely unnoticed and the penalties can be stiff to say the least. That’s exactly why it’s important to get the word out and read up on the Corporate Transparency Act and the penalties for noncompliance.
The Corporate Transparency Act was passed in 2021 to require your small business to report information about ownership to the government.
So which businesses are subjugated to the new law? Those with fewer than 20 full-time employees, an operating presence in the U.S., and/or $5 million or less in gross receipts. If you think that sounds like a lot of farms and small ag businesses, you’d be right.
The law requires these companies to disclose the name, date of birth, physical residence address, and photo ID for all “beneficial owners” (defined as anyone who has substantial control over the company or who owns or controls at least 25% of the ownership interests).
This must be done by Jan. 1, 2025, to avoid civil penalties of up to $500 per day, a $10,000 fine, and up to two years of prison. This gives current companies one full year to get this done.
With fines like that, this isn’t something to take lightly.