The Importance of Corporate Transparency Act Compliance

In 2021, the Corporate Transparency Act (CTA), a new regulation with the intent of preventing corrupt actors, terrorists, and criminals from laundering money in the United States, was announced. As organizations wait for the CTA’s January 1, 2024 effective date, the broader topic of corporate transparency has become a new focus.

Today, every legal business entity regardless of its classification, size, ownership, and success is subject to at least one compliance regulation. These regulations may include annual reporting requirements or other state or federal regulations. The purpose of these rules and regulations is to ensure that businesses operate in accordance with the law and can maintain their legal status. Corporate transparency is when a company openly shares information with individuals, teams, the entire company, or even the public. Whether meeting government regulations or updating stakeholders on revenue and other important information, businesses must disclose their actions to someone outside of the organization.

Compliance is critical, and it’s important that your organization is aware of both local and national rules and regulations so as to comply. Because filing and reporting due dates and requirements vary from state to state, managing the timelines for multiple entities can be challenging. Your business will need to comply with federal, state, and local obligations in order to stay in good legal standing, avoid wasting time and accruing costly penalties, and for peace of mind.

Organizations of all types and sizes, whether public or private entities, for-profit or nonprofit, state, or federal are exposed to compliance risks. Compliance risks are an organization’s potential exposure to legal penalties, financial forfeiture, and material loss, resulting from a failure to act in accordance with governing laws and regulations and internal policies. Non-compliance puts your organization at risk of losing its good standing and forfeiting revenue, among other factors.

Corporate Transparency Act compliance may seem like a daunting task, but EntityKeeper is here to help. Download our Corporate Transparency Act toolkit to find everything you need to make compliance a breeze in 2023 and onward:

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