Small businesses often bear the brunt of new regulations, and the latest federal legislation is no different. The Corporate Transparency Act (CTA), enacted in 2021, aims to reduce money laundering by identifying shell companies used for illegal transactions. The CTA requires the creation of a registry for businesses with less than $5 million in annual sales and fewer than 20 employees.
The impact of this new legislation could be significant for millions of small businesses, as they may struggle to comply with the onerous reporting requirements and face hefty fines for noncompliance. Small business owners must stay informed about these new regulations and their potential consequences.
Overall, while the CTA is a broad effort to tighten money-laundering laws, small businesses may disproportionately bear the brunt of these new regulations. To avoid potential fines and penalties, small business owners must closely monitor any changes and ensure compliance.