Small businesses are often the most affected by regulations, and the latest federal legislation is no different. The Corporate Transparency Act (CTA), enacted in 2021, is aimed at reducing money laundering and assigns the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) with identifying shell companies used for illegal transactions. This new legislation could have a significant impact on small businesses, as they may not have the resources to comply with the new reporting requirements or the financial means to pay the fines for noncompliance.
Millions of small businesses may soon be affected by the onerous reporting requirements and fines for noncompliance brought about by the CTA. It is important for small businesses to stay informed about these new regulations and their potential impact. Small business owners will need to closely monitor any changes and ensure that they are in compliance to avoid potential fines and penalties.
Overall, the CTA is a broad effort to tighten money-laundering laws, but the implications for small businesses could be significant. As the law is implemented, it is essential for small business owners to understand their obligations and take steps to ensure compliance. The CTA is another example of how small businesses can be disproportionately affected by federal regulation.