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The U.S. Corporate Transparency Act (CTA) was signed into law in January 2021, with the aim of creating a centralized database of beneficial ownership information for U.S. corporations and limited liability companies. This new law will have a significant impact on businesses, especially those with complex ownership structures, and will require them to gather, maintain, and report accurate and up-to-date information about their beneficial owners.
One way to comply with the CTA's requirements is through the use of entity management software. This software can help businesses keep track of their ownership structures and provide an efficient and streamlined process for reporting beneficial ownership information to the government.
The Corporate Transparency Act is a federal law that requires certain U.S. corporations and limited liability companies to disclose information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. The Act defines a beneficial owner as any individual who directly or indirectly owns 25% or more of the equity interests in the entity, or who exercises substantial control over the entity.
The CTA is intended to combat money laundering, terrorist financing, and other illicit activities by providing law enforcement agencies with access to accurate and up-to-date information about the beneficial owners of U.S. companies. The law will also make it more difficult for individuals and organizations to use anonymous shell companies to conceal their ownership of assets and engage in illegal activities.
The CTA imposes new reporting obligations on covered entities, requiring them to submit beneficial ownership information to FinCEN within specified timeframes. Failure to comply with the reporting requirements can result in civil penalties and criminal charges.
To comply with the CTA's requirements, businesses will need to gather and maintain accurate and up-to-date information about their beneficial owners. This can be a daunting task, especially for businesses with complex ownership structures involving multiple layers of ownership and control.
Entity management software can help businesses navigate these challenges by providing a centralized database of ownership information and a streamlined process for collecting and reporting beneficial ownership data. This software can automate many of the tasks involved in entity management, such as tracking changes in ownership and control, generating reports, and ensuring compliance with regulatory requirements.
There are several benefits of using entity management software to comply with the CTA's reporting requirements.
Entity management software provides a centralized database of ownership information that is easily accessible and up-to-date. This database can be used to track changes in ownership and control over time, ensuring that businesses have accurate and complete information about their beneficial owners.
Entity management software can automate many of the tasks involved in reporting beneficial ownership information to FinCEN. This can save businesses time and resources, while also reducing the risk of errors and inaccuracies in the reporting process.
Using entity management software can help businesses stay compliant with the CTA's reporting requirements by providing a structured approach to entity management and ownership tracking. This can help businesses avoid fines and penalties for non-compliance.
By using entity management software, businesses can improve their visibility and transparency, both internally and externally. This can help build trust with stakeholders, including customers, investors, and regulators, and can also help businesses identify and mitigate potential risks associated with their ownership structures.
The U.S. Corporate Transparency Act will have a significant impact on businesses, especially those with complex ownership structures. Compliance with the Act's reporting requirements can be a daunting task, but the use of entity management software takes the stress out of the process. Allowing you to focus on other aspects of your business.
Athennian is here to provide you with entity management software that puts your mind at ease. Schedule your free customized demo today.
"Very easy to use, modern interface, excellent support. Athennian has an amazing conversion team. They helped us migrate all of our data and the training was very good."
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“When we were reviewing other entity management systems on the market, in some cases, we were not comparing apples to apples. But with Athennian, there was really no comparison. The paralegals were so excited to come on board.”
"There are so many things I like about this program, but the one thing that really stands out is the user friendly interface. The program is fast and allows me to enter corporate information very quickly and efficiently. I would also like to note that Athennian provides the most the fantastic customer service."
