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This is a guest opinion column
This year small businesses around the country, and right here in Alabama, have a new regulation to follow that I bet most of you have never heard of: beneficial ownership information reporting.
Implemented by Congress in the Corporate Transparency Act (CTA) and by the Treasury Department this new report applies to all small businesses formed in 2024. Yes all!
And it will eventually apply to existing businesses next year.
So, what is it? It is a report that requires each small business to submit personal information to the Treasury Department on who their beneficial owners are. For some, like a sole proprietorship, it’s easy. However, what is a beneficial owner is vague and for many others this could encompass advisors, children, accountants, and all kinds of other people ancillary to the business.
No business loves more paperwork, but this new report is particularly troublesome. It creates a brand new requirement for small business owners to send personal information to a federal agency that not only has had cybersecurity issues in the past, but that will share this information with foreign governments.
A recent survey by the National Small Business Association (NSBA) found that 47 percent of small business owners have no idea about the CTA and that 44 percent will likely consult an outside service (lawyer, CPA, etc.). This could add hundreds if not thousands of dollars of costs to small business bottom lines, even assuming there is no data breach.
Fortunately, the NSBA is challenging the new mandate from the federal government but I still wanted to let all my neighbors and fellow small business owners know about this new requirement so they can begin preparing and looking into it themselves.
This is just my humble opinion from a Black owned, woman owned small business in Huntsville, Ala.
Vicki Morris is Founder & CEO of Face to Face Marketing in Huntsville
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