Operating a small business today involves more than just perfecting products and mastering marketing, bookkeeping, and taxes. The Austin Chamber of Commerce is committed to keeping businesses informed about evolving laws and regulatory requirements.
In 2024, a new federal regulation introduced an additional mandatory reporting requirement for most small businesses nationwide. The Corporate Transparency Act (CTA) aims to enhance business transparency by mandating companies to report individuals who directly or indirectly own or control them to the Financial Crimes Enforcement Network (FinCEN). Consequently, most small businesses must file a Beneficial Ownership Information Report (BOIR) with FinCEN. These regulations aim to close loopholes that have allowed misuse of corporate entities for fraudulent purposes.
Failure to file a BOIR accurately and on time could lead to criminal charges, up to two years in prison, fines up to $10,000, and daily civil penalties of $500. Such consequences could severely impact small and medium-sized businesses that constitute the majority in Texas and across the United States.
Currently, only about 5% of the 32 million small businesses required to file have done so. A significant reason for this low compliance rate is the general lack of awareness regarding the new regulations. However, ignorance of the law does not exempt one from penalties.
Business owners are advised to file their BOIR promptly. For those needing assistance navigating this process, third-party experts can help prevent incorrect filings. LegalZoom, which has an office in Austin and is a member of the Austin Chamber of Commerce, offers such services. LegalZoom's survey revealed that some business owners began filing with FinCEN but faced difficulties answering specific questions and sought LegalZoom’s assistance for live support.
The Austin Chamber encourages collaboration within the business community to ensure compliance with BOIR requirements. For further information on BOIR or other regulatory needs, businesses can utilize resources provided by the Chamber.
More information about LegalZoom's services can be found here.