Update, Jan. 3, 2025: Enforcement of the Corporate Transparency Act has met multiple legal challenges. The Fifth Circuit Court of Appeals panel on Dec. 26 reinstated the nationwide injunction against the act, making compliance with the act’s reporting requirement voluntary until at least March 25, when the panel will hear arguments on whether to keep the injunction in place.
If the panel stays the injunction, businesses may have short time to comply with the Corporate Transparency Act; therefore, dental practice owners who have not already complied with the act are encouraged to file their beneficial ownership information online with the Financial Crimes Enforcement Network. FinCEN is accepting reports submitted voluntarily. CDA will keep members informed through the newsroom and weekly newsletter about the act’s enforceability.
Jan. 23, 2024: Owners of dental practices and other small businesses with fewer than 20 employees are newly required to report their ownership information to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network in compliance with the federal Corporate Transparency Act. The purpose of the bipartisan act, enacted with bipartisan support in 2021, is to curb illicit finance, such as money laundering, drug trafficking and corruption.
The Financial Crimes Enforcement Network, or FinCEN, began accepting the reports, called beneficial ownership information reports, from employers at the start of the new year, but businesses that existed prior to 2024 and are currently operating have until Jan. 1, 2025, to submit the reports. Businesses that form in 2024 or subsequent years have 90 days from business creation or registration to comply with the reporting requirement.
Sole proprietors are not required to comply with the Corporate Transparency Act. Certain other entities, including government authorities, banks and public utilities, are exempt from the act’s reporting requirements.
Reporting is open now and is not an annual requirement
Business owners will only submit the beneficial ownership report one time unless they have a change of ownership, in which case they are required to file an updated report within 30 days after the date of ownership change.
Information required on the report includes the owner’s name, date of birth, address and identifying number and issuer of a permitted form of official identification.
Current dental practice owners can take steps now to learn more about the requirement and submit a report. Use these resources:
- Beneficial Ownership Information: File a required report online through the website of the Financial Crimes Enforcement Network.
- FinCEN’s FAQ on the Corporate Transparency Act’s reporting requirement: Get details on the reporting requirements and process, qualifying exemptions, how to submit an updated report and more.
- Dental Incorporations — What You Need to Know: Understand all the considerations of forming a dental corporation. CDA’s practice analyst updated the form in January 2024 to include information related to the Corporate Transparency Act. The resource also outlines the dental corporation’s legal requirements and how the corporation differs from a sole proprietorship.
Be aware of fraudulent attempts to solicit information
Dentists and other small-business filers should note that an alert posted on the FinCEN website reads: “FinCEN has been notified of recent fraudulent attempts to solicit information from individuals and entities who may be subject to reporting requirements under the Corporate Transparency Act.” Filers are urged not to respond to any correspondence that asks recipients to click on a URL or scan a QR code.