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CTA Widely Misunderstood in the Business World

More than 32 million small businesses must file reports to the federal government under the Corporate Transparency Act (CTA), which went into effect on January 1. Despite this, many of these businesses and their executives are unaware of their obligations under the CTA. Or, maybe worse, they misunderstand the law and what’s required of them.

“The vast majority of companies we’ve spoken with since the start of the year get something about the CTA wrong,” said Steven Friedman, founder and CEO of Platinum Filings – a legal services company with CTA-specific expertise. “They aren’t studying the law enough to learn its subtleties and details, and their advisors aren’t filling in the gaps. With the penalties for noncompliance as steep as they are, they just can’t afford to be wrong.”

In this and future newsletters, we’ll explore in depth the nuances of the CTA and provide more detail about what businesses and owners need to know. In the meantime, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has published a Q&A document about the CTA. Platinum Filings also has produced a white paper recapping the relevant parts of the CTA for businesses everywhere, and what they need to do to comply.