ARTICLE
By: Joshua Massingill, Esq. As we stand at the threshold of 2024, a significant regulatory shift with far-reaching implications is about to take center stage—the Corporate Transparency Act (CTA). This federal law, which is scheduled to take effect on January 1, 2024, will significantly impact millions of unsuspecting small business owners and entrepreneurs who own and operate their own business – including chiropractors. Existing entities and newly formed enterprises will be required to submit filings with the Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Department of the Treasury. The Essence of the CTA The CTA is a federal law designed to enhance financial oversight and combat financial crimes, including money laundering and illicit financing for nefarious purposes. The linchpin of this endeavor is the concept of beneficial ownership, or the identification of individuals who exert control or reap benefits from a business behind-the-scenes. Understanding the Scope The CTA casts its net over various entities, including corporations, LLCs, and limited partnerships, formed under state jurisdiction. Many federal laws, such as the Family and Medical Leave Act (FMLA) and the Occupational Safety and Health Act (OSHA), exempt small businesses from full compliance, but the CTA does not. This means that the majority of small to medium-sized businesses will find themselves squarely on the CTA’s radar. For this reason, clinic owners should acquaint themselves with the CTA’s requirements and make plans to comply to avoid penalties. The Path to Compliance Complying with the CTA will involve submitting comprehensive beneficial ownership information to the federal government. This means sharing detailed information (such as names, addresses, and government IDs) for the people who really own or control your practice. Because the filing process is expected to be complex, many business owners will likely rely on attorneys to oversee their CTA compliance—but intrepid entrepreneurs may prefer a DIY approach. Challenges and Considerations While the CTA aims to enhance transparency and create an environment less hospitable to fraud and illegal activities, it is not without its challenges and concerns. Privacy and data security issues loom large, necessitating a proactive approach by business owners. Staying informed about data protection measures and FinCEN's operational protocols will be crucial in order to create a strong line of defense against bad actors looking to take advantage of potentially vulnerable information. Conclusion The Corporate Transparency Act heralds a new era in federal business regulation. Small business owners and entrepreneurs should pay close attention to the implementation of this law and take note of how it will affect their business, as well as work diligently to ensure they comply with legal requirements. Failure to adhere to the CTA’s requirements may result in significant penalties. If you have questions about the CTA’s requirements or aren’t sure whether the law applies to your practice, consult an attorney for individualized advice. Joshua Massingill Bio: Joshua is a native Texan and a graduate of Pepperdine University School of Law and the Straus Institute, the nation’s top-ranked dispute resolution program. Joshua Massingill is an attorney practicing in Austin, Texas. He serves on the Texas State Bar’s Law Practice Management Committee, the Leander Educational Excellence Foundation (LEEF) Board of Directors, and the Success-Werx Board of Advisors. He mentors young entrepreneurs in Leander ISD’s INCubatorEDU program and is active in his church. He served as Legislative Counsel to a United States Representative in Washington, DC until 2014, when he decided to return to Texas for reasons every Texan will inherently understand. As Counsel to the Texas Senate Committee on Health and Human Services, he managed a broad portfolio of legal and regulatory issues and contributed to significant legislative reforms. As an attorney and lobbyist for the Texas Chiropractic Association, he is widely recognized as being knowledgeable about legal issues facing Texas chiropractors. He assisted in drafting SB 679, a landmark bill authorizing chiropractors to jointly own medical entities with physicians and helped guide the bill to passage. He routinely manages seven- and eight-figure corporate transactions for domestic and international clients in assorted industries (healthcare, manufacturing, real estate, and others). His previous clients include various elected officials, members of Texas health licensing boards, and a former Surgeon General of the United States. He is passionate about the Dallas Cowboys and providing his clients with excellent service. Top of Form
By: Joshua Massingill, Esq.
As we stand at the threshold of 2024, a significant regulatory shift with far-reaching implications is about to take center stage—the Corporate Transparency Act (CTA). This federal law, which is scheduled to take effect on January 1, 2024, will significantly impact millions of unsuspecting small business owners and entrepreneurs who own and operate their own business – including chiropractors. Existing entities and newly formed enterprises will be required to submit filings with the Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Department of the Treasury.
The Essence of the CTA
The CTA is a federal law designed to enhance financial oversight and combat financial crimes, including money laundering and illicit financing for nefarious purposes. The linchpin of this endeavor is the concept of beneficial ownership, or the identification of individuals who exert control or reap benefits from a business behind-the-scenes.
Understanding the Scope
The CTA casts its net over various entities, including corporations, LLCs, and limited partnerships, formed under state jurisdiction. Many federal laws, such as the Family and Medical Leave Act (FMLA) and the Occupational Safety and Health Act (OSHA), exempt small businesses from full compliance, but the CTA does not. This means that the majority of small to medium-sized businesses will find themselves squarely on the CTA’s radar. For this reason, clinic owners should acquaint themselves with the CTA’s requirements and make plans to comply to avoid penalties.
The Path to Compliance
Complying with the CTA will involve submitting comprehensive beneficial ownership information to the federal government. This means sharing detailed information (such as names, addresses, and government IDs) for the people who really own or control your practice. Because the filing process is expected to be complex, many business owners will likely rely on attorneys to oversee their CTA compliance—but intrepid entrepreneurs may prefer a DIY approach.
Challenges and Considerations
While the CTA aims to enhance transparency and create an environment less hospitable to fraud and illegal activities, it is not without its challenges and concerns. Privacy and data security issues loom large, necessitating a proactive approach by business owners. Staying informed about data protection measures and FinCEN's operational protocols will be crucial in order to create a strong line of defense against bad actors looking to take advantage of potentially vulnerable information.
Conclusion
The Corporate Transparency Act heralds a new era in federal business regulation. Small business owners and entrepreneurs should pay close attention to the implementation of this law and take note of how it will affect their business, as well as work diligently to ensure they comply with legal requirements. Failure to adhere to the CTA’s requirements may result in significant penalties. If you have questions about the CTA’s requirements or aren’t sure whether the law applies to your practice, consult an attorney for individualized advice.
Joshua Massingill Bio:
Joshua is a native Texan and a graduate of Pepperdine University School of Law and the Straus Institute, the nation’s top-ranked dispute resolution program.
Joshua Massingill is an attorney practicing in Austin, Texas. He serves on the Texas State Bar’s Law Practice Management Committee, the Leander Educational Excellence Foundation (LEEF) Board of Directors, and the Success-Werx Board of Advisors. He mentors young entrepreneurs in Leander ISD’s INCubatorEDU program and is active in his church.
He served as Legislative Counsel to a United States Representative in Washington, DC until 2014, when he decided to return to Texas for reasons every Texan will inherently understand. As Counsel to the Texas Senate Committee on Health and Human Services, he managed a broad portfolio of legal and regulatory issues and contributed to significant legislative reforms.
As an attorney and lobbyist for the Texas Chiropractic Association, he is widely recognized as being knowledgeable about legal issues facing Texas chiropractors. He assisted in drafting SB 679, a landmark bill authorizing chiropractors to jointly own medical entities with physicians and helped guide the bill to passage.
He routinely manages seven- and eight-figure corporate transactions for domestic and international clients in assorted industries (healthcare, manufacturing, real estate, and others). His previous clients include various elected officials, members of Texas health licensing boards, and a former Surgeon General of the United States.
He is passionate about the Dallas Cowboys and providing his clients with excellent service.
Top of Form