Legal Brief: Inside the New Corporate Transparency Act
November 20, 2024
Security Business Magazine
Types : Bylined Articles
Aimed at small businesses and LLCs, it requires disclosure of a company’s ownership
In the children’s book, Franklin Fibs by Paulette Bourgeois, Franklin the Turtle tries to impress his friends by falsely claiming that he can swallow 76 flies in the blink of an eye. In the end, Franklin learns the importance of telling the truth – a lesson we hope all young readers absorb. However, not all people abide by this lesson. Some people must be compelled by law to tell the truth – or at least not be fake.
One recent and powerful example is the Corporate Transparency Act (CTA), a federal law enacted in 2021 and effective as of January 1, 2024.
Franklin the Turtle was merely trying to impress his friends. We all do that from time to time; however, we do not all commit crimes. Nevertheless, because some people do and because they use corporate shells to do it, the CTA is an important new tool. Although it will be onerous for good corporate citizens, the CTA is a necessary step to help law enforcement catch the bad guys and protect the integrity of our corporate system.