Beginning January 1dt, 2024, the Corporate Transparency Act (CTA) requires all small businesses with less than 20 employees and $5M in sales to report on the beneficial ownership of their firms to FinCen, (The Department of the Treasury’s Financial Crimes Enforcement Unit). The purpose of the requirement is to help stop the money laundering and financing of terrorist activities through smaller, unregulated firms.
That’s right. You heard it here first. Uncle Sam is worried about you financing terrorism.
Although I just made a joke, this new requirement shouldn’t be considered one. Failure to accurately and timely comply with this requirement comes with penalties of up to $10,000 and two years of three hots and a cot per occurrence.
It’s estimated that this new reporting requirement will affect over 33M small businesses.
The CTA states that a beneficial owner is an individual who, directly or indirectly, either exercises “substantial control” over a reporting company or owns or controls at least 25 percent of the ownership interests of a reporting company. An individual exercises “substantial control” if they…
1 – Serve as a senior officer of the company
2 – Have authority over the senior officers or the majority of the board
3 – Have substantial influence over the company’s important decisions
4 – Have any other type of substantial control over the company.
The following types of individuals are not considered beneficial owners of a reporting company:
1 – Minor children
2 – An individual acting as a nominee, intermediary, custodian, or agent on behalf of another individual
3 – An employee of the reporting company, acting solely as an employee, whose substantial control over or economic benefits from the entity are derived solely from their employment status
4 – An individual whose only interest in a reporting company is a future interest through a right of inheritance
5 – A creditor of the reporting company, unless they exercise substantial control or have a 25% ownership interest
The form that will need to be filed has not yet been published. Entities formed or registered before January 1st of 2024 must file their initial report to Fincen no later than January 1st or 2025.
I’ll continue to write on this subject and more information is available.
Let me leave you with this.
Today is the heavenly birthday of my mother, Dawn Nancy Amundson. We lost her a couple of years ago on the day after Christmas Day. She was only 75.
To say that she was an accomplished entrepreneur is to make an understatement. Her entrepreneurial journey began when I was four. She bought a Kirby vacuum cleaner distributorship down on Armitage. It didn’t last long, a few months.
But please realize that at a very young age, Mama had true ambition. She was 24 years old with a high school education, a couple of college courses under her belt, a four year old son back at home, and was a minority.
Back in 1970, this just wasn’t done. People like her didn’t own businesses. Her first stab at entrepreneuring failed as most do, but she didn’t let that stop her.
In August of 1976, a month after the bicentennial, Mama opened Amundson Arts Academy teaching dance, drama, voice, and music. The business was in a storefront at Montrose and Central in Portage Park.
She worked hard building that business; years of ten and twelve hour days. A couple of years later, what happened? The ’78 – ’81 depression. Things were tough.
Mom had plenty of professional students who needed representation, so she set up a booking agency named Aaron Alexander Enterprises. She made up that name so that she would be first in the Yellow Pages when people were looking for entertainment. So we started booking piano bar acts, duos, trios, bands, and dancers to the hospitality industry here in Chicago.
You need to realize what that business was like. Some food and beverage manager at a hotel would call and say, “I need someone to stand on their head, juggle, and sing the ‘Star Spangled Banner.'” You ‘d say, “No problem. $500.”
At which point you needed to go find some crazy person to do the job, which in Chicago isn’t that hard to do. My point is that we were constantly selling what we didn’t have. This runs contrary to reason, but that’s just what happens in that business.
Back then, the corporate event planning business was dominated by florists. It was all about decorations. You’d go to a Country and Western Hoedown and it would look like a funeral; nothing but flowers. You’d go to a Chicago Gangster party, and see even more flowers.
Mom looked at this and said, “This is stupid. People make the party, not the decorations, and I have the people.” So she had me put together flyers, advertising her new event planning business.
We put together four flyers for a Hawaiian Luau, a Chicago Gangster Party, a Country and Western Hoedown, and this new thing that everyone was talking about.
It was something called a Murder Mystery.
No one knew what these were, but again, we were in the business of selling what we didn’t have. We didn’t even think twice about putting this out on the street and seeing what would happen.
I put together a mailing list of 376 General Managers, Food & Beverage Managers, and Catering Managers of hotels and sent out those four flyers. Of course, the phone rang off the hook and no one wanted anything except this thing called a Murder Mystery.
We still had no idea what it actually was, so we booked a show, and found some theater troop to do it. It was a Halloween Party, and I was there. People were running around doing whatever. I looked at this thing and said to myself, “What the hell is this?”
Mama and her then great friend Bernie Bloom took one look at it and said, “We can really do something with this.” And they did.
When I was 19 her business did $250K a year. When I was 23, it did $2.7M. Watching a business grow like that was just a thing of beauty. She had the hottest entertainment ticket in town for years.
All of a sudden she was the largest purchaser of Amtrak Train Tickets in the United States. We all expected the business to go like most fads. In other words, we expected it to go straight up and then straight down, only it didn’t. It plateaued and Mama made her living doing Murder Mysteries for the rest of her life.
Her entrepreneurial journey wasn’t much different than most of ours. You have to hang in there, stick with it, and learn from your mistakes.
On this anniversary, my family will gather at one of the old joints down in Andersonville, where she used to throw back more than a few. It’s getting harder to find her old haunts. Even though she’s only been gone a couple of years, they keep closing.
We’ll have a Martini, a Martwoni, or maybe even a Marthreeni, and toast a life well lived. We’ll remember the good days, and the not-so-good.
But mostly we’ll remember a person who was totally and completely dedicated to her family and her businesses.
When you’re gone, how would you like to be remembered? What will your legacy be?
Will you be remembered by your children and grandchildren as a person who loved first, last, and always? Or will their memories of you not be so gracious?
Today is the first day of the rest of your life. Write your own story. Make it a good one and sing your death song in an honorable fashion without regrets.
As an entrepreneur, you’re the master of your destiny. Make it what you will.
Mama certainly did.
We’re all going to get through this. Let’s get through it together.
As an inducement, we’re offering 33% off your first six months of bookkeeping and / or the first three months of electronic payroll services on a complimentary basis. In order to claim this benefit, please click on the appropriate button below and provide your contact information. We’d love to help.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Employee Retention Credits, M&A Due Diligence, Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
www.SalarySolutions.net
www.AccountingSolutionsLtd.com
Note that the only professional services provided by Accounting Solutions Ltd. are those specified in a written communication from our office detailing the scope of services to be rendered and the terms and conditions applicable to the engagement.