Leveraging Technology for CTA Preparation and Compliance

In 2021, the Corporate Transparency Act (CTA), a new regulation with the intent of preventing money laundering in the United States, was announced. The CTA requires that domestic and foreign entities in the United States file a report with the Financial Crimes Enforcement Network (FINCEN) that includes personal information about the entities’ individual beneficial owners and applicants.

In our most recent On-Demand Webinar, we discuss the specifics of the Corporate Transparency Act and the risks of non-compliance. Watch the webinar, here.

Despite the CTA being passed in 2021, the new reporting system will not come into effect until January 1, 2024. Still, it is important to start preparing your documents and information now so that you can be ready when the regulation takes effect. Failure to comply can result in civil and criminal penalties such as fines and jail time. While gathering and keeping track of all your documents and data can be an arduous process, implementing a technological solution can help to eliminate some of those time-consuming manual tasks.

Why Technology?

Corporate transparency is necessary for companies to maintain good legal standing and engage with their investors. Establishing and maintaining compliance with the CTA will be an ongoing process, and your compliance status can change if you miss filing deadlines or fail to report changes in ownership. An entity management solution can save you time and money by automating some of your tasks and helping you avoid penalties and fees for non-compliance.

4 Ways Technology Can Simplify CTA Compliance

1. Track Filing Deadlines Some entity management software programs can track filing deadlines and automatically alert you to notify when a due-date is approaching. Alerts can come in the form of in-app notifications or emails sent straight to your inbox.
2. Centralize Information and Document Storage A document-tracking system can help you quickly access and manage your business entities and store your compliance documents in a centralized location. You can also easily search for and locate specific documents and information and know that they are the most current version.
3. Use Personnel Record for Personal Identification Documents The CTA requires four pieces of information from each beneficial owner and company applicant:- Full name
   – Date of birth
   – Current residential address
   – Unique identifying number from an acceptable document (passport, state ID card, or driver’s license)*

   Some entity management programs have a built-in personnel record that allows you to search for people by name and upload their identification documents. This way, those documents are securely stored, organized, and easy-to-locate any time you need to access them.

4. Create Groups for Beneficial Owners/Reporting Companies If your software solution includes an organization chart builder, you’ll be able to easily visualize your entities and group each entity’s beneficial owners with the appropriate entity. As beneficial owners change, you can easily update each entity so that you’re sure that your information is as current as possible.

Comply with the Corporate Transparency Act with EntityKeeper

By planning and preparing for the Corporate Transparency Act to take effect, your organization can confidently comply with the new regulation and ensure that you meet the filing deadlines. An entity management solution, like EntityKeeper, can further streamline your processes to ensure ongoing compliance. Schedule a demo or get started today to avoid noncompliance penalties and fines!