BY RICK VERSACE
On January 1, 2024, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) (fincen.gov) initiated a landmark move through the enforcement of the Corporate Transparency Act, a 2021 legislation that was enacted to curb illicit finance. This act mandates that all companies operating in the United States must report information about who owns or control their corporate entity.
The Inception of Compliance
The limo industry, known for its impeccable service and attention to detail, now has another detail that every operator must be concerned with. For existing companies that were already in business before January 1, 2024, the deadline to report is January 1, 2025. However, any new companies created in 2024, have a mere 90 days to file after setting up a new corporation—although that window is reduced to 30 days starting in 2025. The penalties are steep, as much as $500 per day for noncompliance.
Our industry is used to regulatory compliance, but this new federal requirement is something that every operator should be aware of. For small business owners, the cost of noncompliance could cripple your company.
The FinCEN Partnership
While FinCEN adds another layer of complexity to owning and operating your business, the aim of FinCEN is to safeguard the financial system from scams, combat money laundering and related crimes, and promote national security. Part of FinCEN’s mission is a commitment to assist small businesses to come into compliance.
FinCEN has released The Small Entity Compliance Guide on the FinCEN website, which is written in plain language, to help guide small businesses through the requirements step by step. Operators can use the guide for navigating the intricacies of the Corporate Transparency Act. The guide outlines the information needed, the filing process, and the deadlines, making the seemingly complex task more manageable. This report only needs to be filed once unless updates to ownership are required.
Navigating the Compliance Highway
If you have an accountant, make sure they know about any new corporation you might set up, and if you don’t have an accountant, you can file with FinCEN yourself. The process of filing is not complicated, and you can follow the guide provided by FinCEN. The steps are easy to follow and free of charge. The online platform designed for reporting companies streamlines the submission of beneficial ownership information.
The Limelight on Compliance
Compliance is not just a regulatory checkbox; it was an opportunity for businesses to demonstrate their commitment to ethical practices, accountability, and national security. The interconnected nature of the Corporate Transparency Act means that each small business’s compliance contributes to a collective effort to combat scams and money laundering. The data collected by FinCEN, while safeguarding against financial crimes, also served as a powerful tool for national security.
The US Beneficial Ownership Information Registry is now live, and every operator should make sure that all the corporations they own, or control are registered. Compliance with the Corporate Transparency Act should not be looked at as a burden; but an opportunity for businesses to showcase their commitment to ethical practices, accountability, and national security. [CD0224]
Rick Versace is the CEO of A1A Airport & Limousine Service, treasurer of the National Limousine Association, and president of the Florida Limousine Association. He can be reached at rickversace@a1alimo.com.