Protect Your Business and Investments: Add the Corporate Transparency Act to Your Year-End To-Do List 

As we approach the end of the year, business owners have plenty on their plates, from managing financial projections to ensuring compliance with ever-evolving regulations. Among these, the Corporate Transparency Act’s (CTA) Jan. 1, 2025, deadline stands out as a critical, non-negotiable milestone that should be at the top of every California business owner’s year-end checklist.  

For small to mid-size business owners, meeting the CTA’s reporting requirements is more than a legal obligation — it’s pertinent to avoid potentially hefty penalties. But not all business owners must file a report under the CTA. For those that do, Dahl Law Group can provide guidance and answer questions to ensure compliance. 

What is the Corporate Transparency Act, and Why Does it Matter? 

The CTA was passed in 2021 to improve transparency in business ownership across the United States. It requires many businesses to disclose the identities of their “beneficial owners” to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. The goal is to combat illicit activities, including money laundering and financing of terrorism, by ensuring that anonymous business ownership is minimized. 

For California business owners, the CTA deadline brings a new layer of responsibility. All “reporting companies” are required to file information with FinCEN, including names, birth dates, and addresses of beneficial owners. This information is intended to be secure and accessible only to authorized agencies, but the requirement is mandatory, and failing to report carries potential penalties. 

Does the CTA Apply to Your Business? 

The CTA applies to a wide range of companies, but not all. Broadly, a “reporting company” is any corporation, limited liability company (LLC), or similar entity created by filing with a secretary of state or foreign entities registered to do business in the United States. However, there are several exemptions that may apply to your business, including: 

1. Large private companies with more than 20 employees, $5 million in annual revenue, and a physical office in the United States. 
2. Already regulated entities such as banks, credit unions, and insurance companies. 
3. Dormant entities that were inactive for more than a year and have no assets. 

If your business doesn’t fall into one of these exemption categories, you’ll likely need to file.  

What’s at Stake if You Miss the Deadline? 

Failing to meet the Jan. 1, 2025, reporting deadline can lead to serious consequences. Non-compliance with the CTA could result in fines up to $500 per day for each day of violation, and in severe cases, it may even lead to criminal charges. Moreover, once non-compliance is on record, the process of correcting it can be cumbersome and costly, adding to the financial strain on your business. Therefore, acting now is crucial to avoid a situation that could impact both your finances and your reputation. 

Help is Available for California Businesses, Property Owners, and Investors 

With the deadline looming, many business owners are unsure where to begin or worry about the accuracy of their filings. Fortunately, support is available. Dahl Law Group can provide guidance to help your business meet CTA requirements accurately and on time. Whether it’s determining if the CTA applies to your company or filing the necessary paperwork, our team can reduce the stress of compliance while ensuring your business avoids fines and penalties. 

The Bottom Line: Act Now 

 As you approach the end of the year, prioritize meeting the CTA requirements as part of your business’s compliance and financial health. By addressing this legal obligation now, you’ll enter the new year free from the worry of potential penalties or legal issues related to CTA compliance. If you’re uncertain about your obligations or need assistance, reach out to Dahl Law Group today so we can help.