By BRENT MARTIN
St. Joseph Post
Area small businesses will have to comply with a new federal rule beginning with the new year, a rule aimed at cracking down on financial fraud.
Northwest Missouri State Small Business Development Center Director, Rebecca Lobina, says the new rule affects 30 million small businesses. Congress approved the Corporate Transparency Act a couple of years ago and it goes into effect next year.
“If you are an existing business right now, then you have a full year to file,” Lobina says. “So that’s good news. Beginning January 1, you have until January 1 of 2025 to file. So you have plenty of time to do this, just don’t let it slip off your radar.”
Small business owners must file paperwork with the federal Treasury Department.
Lobina says the motive behind the legislation is to reduce illicit activity, such as money laundering.
Under the law, business owners aren’t the only ones who must comply. Anyone with an interest in the business, what the federal government calls having a Beneficial Ownership Interest, must provide full identification. Those included in the legislation are presidents, CEOs, and other executives within the company. Stiff civil and criminal penalties will be assessed against those who fail to comply.
The law applies to small businesses. It exempts businesses with more than 20 employees with more than $5 million in gross revenues, according to Lobina.