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Risks of Non-Compliance

At Barna, Guzy & Steffen, our corporate practice group monitors developments related to the Corporate Transparency Act (CTA). We have addressed various aspects of the CTA in previous blog posts. We recommend reviewing those if you haven’t already done so. Today, we aim to highlight potential implications and risks of non-compliance. Regulations and Disclosures The Financial Crimes Enforcement Network (FinCEN), a bureau within the U.S. Treasury Department, has recently proposed final rules related to the enforcement of the CTA. The bureau’s primary objective is eliminating corporate anonymity and hindering money laundering activities. While the final regulations interpreting and giving detailed compliance instructions on the CTA are not yet available as of the date of this post, a person will be required to make disclosures to FinCEN starting on January 1, 2024, if the person: participated in forming a corporate entity; or owns more than 25% of an entity; or has significant control over an entity, such as making hiring and firing decisions at the C-suite level. You will also need to report to FinCEN when there are changes to the information in the initial report, such as when you relocate or when the ownership or control of the underlying entity changes. Significant Consequences of Non-Compliance Any individual who intentionally supplies false information or…