The Corporate Transparency Act (“CTA”), which became effective January 1, 2024, imposes strict reporting guidelines on small business owners throughout the country. The deadline for non-exempt businesses to submit reporting is December 31, 2024. More information is available here: https://www.fincen.gov/boi.

Who Must Report?

All domestic and foreign corporations, limited liability companies (LLCs), or other entities created by the filing of a document with the Secretary of State or similar office in the United States must file, unless it qualifies for one of the several enumerated exemptions identified in the Rule.

There is no exemption that squarely applies to for-profit independent audiology practices.

A business required to file (a “reporting company”) will need to include certain specified personal information concerning:

• The business itself.
• Any owners holding 25% or more of the stock, voting rights, or ownership interests in the company.
• Any other individuals (such as senior officers or other important decision makers), whether or not they are owners, who exercise substantial control over the company’s finances, structure, or business operations.
• Individuals who filed, or directed the filing, of the organizing documents that created or registered the company (for entities formed after 1/1/2024).

The personal information for any individual required to be disclosed includes the individuals full name and address, date of birth, and other identifying information such as a passport number, driver’s license number, etc.

Broadly, 23 various exemptions exist, but mostly apply to entities already subject to some other reporting requirements. For example banks, publicly traded companies and/or public utilities are exempt. Generally speaking, there are no exemptions for for-profit small business owners.

Penalties for Failure to Comply.

The civil penalty for failing to file reporting required under the CTA if $591 per day, up to a total of $10,000. Also note that criminal penalties are authorized for any person who willfully (i) provides or attempts to provide false/fraudulent information or (ii) fails to report and/or update a report previously made.

How to Comply?

If you determine you have a reporting obligation, the information is reported to, and maintained by FinCEN as part of the Beneficial Ownership Information Rule. FinCEN is a bureau of the U.S. Department of the Treasury. Report can be made online at Beneficial Ownership Information Reporting | FinCEN.gov.

Are these reports confidential?

Yes. Completed reports are not public record; reporting is maintained by the financial crimes wing of the Department of the Treasury in a database that’s only accessible by state and federal law enforcement.

If you have questions or concerns regarding the CTA, there are resources to assist such as the Small Business Compliance Guide published by FinCen.

If questions or doubts remain regarding your compliance, please contact a knowledgeable attorney to provide relevant guidance.

Thank you for your attention.