What is the Federal Corporate Transparency Act (CTA) and How Does it Impact Board Members?

The Federal Corporate Transparency Act (CTA) is a significant piece of federal legislation that went into effect January 1, 2024. This law mandates that certain businesses disclose ownership information to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). The primary goals of the CTA are to increase business transparency and accountability, thereby preventing illegal activities such as fraud, money laundering, and tax evasion.

Importantly, the CTA applies to community associations. Current board members of these associations are considered “beneficial owners” under the law. Consequently, all board members must provide FinCEN with detailed personal information, including: their legal name, date of birth, residential address, and a copy of a valid, unexpired government-issued identification.

  • Penalties: Non-compliance, whether intentional or not, could result in severe penalties, including fines of up to $10,000 and up to two years in prison.
  • Deadline: This act went into effect on January 1, 2024, with a compliance deadline set for January 1, 2025.

Below are two KSN educational resources that further address the Federal Corporate Transparency Act (CTA):

 

Complying with the CTA: How can KSN Help Community Association Board Members?

Since 1983, KSN has been proud to assist thousands of community associations throughout the United States. In preparation to comply with the CTA, our law firm has invested significant time and effort into protecting our clients’ private information using high-grade encryption.

KSN is prepared to assist board members in navigating the CTA’s requirements and deadlines by:

  • Preparing and filing the correct documentation with the U.S. Department of the Treasury within the required reporting timeframe.
  • Providing proper board member personal identification to the U.S. Department of the Treasury in a secure manner.
  • Updating the U.S. Department of the Treasury when there are changes to your community association’s board (e.g., following annual elections or when a board member moves, etc.).

Legal Services/Fees:

  • Retainer: These services are covered in the Enhanced or Premium level Retainer with KSN. If interested in a Retainer proposal, please contact your KSN attorney.
  • Initial Submission Fee: $400.00 – This fee covers the initial submission of board member information to the U.S. Department of Treasury in compliance with the CTA. It includes all current board members. After the first board member provides their complete information, there is a 30-day window for all other board members to submit their information. If any board member submits their information within this 30-day period, their submission is included in the initial $400.00 fee.
  • Late Submission Fee: $75.00/board member – If a board member submits their information after the 30-day window has expired, an additional fee of $75.00 per board member will be charged for their submission.

For more information or assistance with compliance, please contact KSN. You can reach KSN by calling 855-537-0500 or visiting our website at www.ksnlaw.com.

Since 1983, KSN has been a legal resource for condominium, homeowner, and townhome associations. Additionally, we represent clients in real estate transactions, collections, landlord/tenant issues, and property tax appeals. We represent thousands of clients and community associations throughout the US with offices in several states including Florida, Illinois, Indiana, and Wisconsin.

 

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