New corporate transparency rules affect farmers
With a critical deadline on the horizon, over 230,000 farms across the United States must prepare to comply with the Corporate Transparency Act by January 1, 2025. This legislation requires the submission of detailed Beneficial Ownership Information to the Treasury Department, targeting entities like LLCs, corporations, and limited partnerships.
The Act was introduced to curb illegal activities through business entities, including money laundering and the funding of organized crime, by increasing the transparency of business ownership.
Affected businesses are those with under 20 employees or less than $5 million in annual revenue, a criterion that encompasses a wide array of rural businesses, including those operating in the agricultural sector.
Penalties for non-compliance are severe, with the potential for imprisonment. Required submissions include information not just on legal owners but also on individuals with substantial managerial control, which could extend to family members or others significant to the business’s daily operations.
It is essential for farm owners and other small business operators to be aware of their responsibilities under this Act.
Consulting with legal and financial professionals can provide clarity and facilitate compliance, ensuring that all necessary documents are filed correctly and on time. This measure is not only a legal safeguard but also a step towards maintaining the integrity and transparency of the agricultural and rural business sectors in the economy.