The Corporate Transparency Act

10 Compelling Reasons Lawyers Should Prioritize Compliance for Their Clients

Staying ahead of regulatory changes is of utmost importance for legal professionals, and the Corporate Transparency Act (CTA) stands out as a significant and transformative regulation demanding immediate attention.

With the enforcement of the Corporate Transparency Act (CTA) scheduled for January 1, 2024, it's essential to recognize that roughly 32 million entities will soon be obligated to disclose personal information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), an agency operating under the U.S. Treasury Department. While the primary objective of this legislation is to combat money laundering, terrorist financing, and other financial crimes, its broad set of regulations will have substantial implications for a wide range of businesses operating in the United States.

Companies established before January 1, 2024, have until January 1, 2025, to submit their initial report to FinCEN. According to the proposed regulations unveiled on September 27, 2023, companies established between January 1, 2024, and January 1, 2025, are required to file their initial report within 90 days of the company's formation. For companies established after January 1, 2025, the requirement is to file an initial report within 30 days following the company's formation. Legal professionals must remain well-informed and prepared for these upcoming changes.

As lawyers, your role is pivotal in guiding clients through the complexities of the CTA.

Ten Compelling Reasons

Here are ten compelling reasons why lawyers should make CTA compliance a top priority for their clients:

1. Legal Obligations
   The CTA mandates that companies report beneficial ownership information. Lawyers must ensure their clients understand and adhere to these legal requirements to avoid penalties.
2. Fines and Penalties
   Non-compliance with the CTA can lead to substantial fines and penalties, making it essential for lawyers to help their clients mitigate these risks.
3. Reputation Management
   By aiding clients in CTA compliance, lawyers can protect their clients' reputations by demonstrating a commitment to ethical and transparent business practices.
4. Risk Mitigation
   Lawyers can provide valuable insights to clients, assisting them in assessing the potential risks related to their beneficial ownership structures.
5. Client Trust
   Assisting clients in CTA compliance builds trust and positions lawyers as essential advisors in a rapidly changing compliance landscape.
6. Data Security
   With the increased focus on data transparency, lawyers can help clients safeguard their sensitive information, minimizing the risk of data breaches.
7. Business Continuity
   By ensuring compliance with the CTA, lawyers help clients avoid disruptions to their operations and financial stability.
8. International Alignment
   The CTA aligns the U.S. with international standards for transparency and anti-money laundering efforts, which can benefit global business operations.
9. Due Diligence Enhancement
   Lawyers can support clients in strengthening due diligence processes to provide a deeper understanding of their business partners and clients.
10. Competitive Edge
    Lawyers who assist their clients in CTA compliance can provide a competitive edge by demonstrating a proactive approach to an evolving regulatory landscape.

The Corporate Transparency Act isn't just another piece of legislation; it's a game-changer in corporate transparency. As legal professionals, you are responsible for guiding your clients through this transformation, ensuring their businesses remain compliant and protected.

Law firms should act as proactive stewards of the Corporate Transparency Act, providing expert guidance to their clients to navigate the complexities of CTA compliance. This approach not only safeguards businesses from legal ramifications but also cements the role of lawyers as indispensable partners.

How Kim Helps
Kim has created an automated system which enables lawyers to effortlessly compile all the necessary information from their clients in relation to the Beneficial Ownership Information (BOI) Report as part of the CTA. Visit our dedicated page and “Test the Experience” as if you were one of your clients.

The important thing to remember is that you can customize the text and layout of the form used in our test. You can add or remove questions and personalize the generated form with your logo. If you want to send the form out to all your clients using Kim's campaign functionality and you are utilizing O365, then the emails will be sent from your email address or one of your designated form service accounts.

The campaign functionality of Kim Document is incredibly versatile. It can cater to your needs, whether you need to distribute the template to a handful of clients or to a substantial client base spanning tens, hundreds, or thousands. This functionality offers comprehensive tracking, document generation, and, where relevant, integration with other systems.

Visit our dedicated page and Test the Experience or Book a Demo to see it in action.