Small business owners should not forget about a rule — currently in legal limbo — that would require them to register with an agency called the Financial Crimes Enforcement Network, or FinCEN, by Jan. 1.
The registration is part of the Corporate Transparency Act, an anti-money laundering statue passed in 2021. Under the CTA, the owners and part-owners of an estimated 32.6 million small businesses must register personal information with FinCEN, such as a photo ID and home address.
Registering isn’t difficult, but if a small business owner is unaware of the requirement, they could be slapped with penalties of up to $10,000. Businesses with more than 20 employees and more than $5 million in sales can qualify for exemptions.
For now, the rule is on hold. On Dec. 3 a federal court in Texas issued a preliminary injunction prohibiting enforcement of the rule. FinCen has said registering is voluntary. …