The Corporate Transparency Act (CTA) is a new law that affects small businesses in the U.S., including LLCs, corporations, and professional entities. Its main purpose is to help stop illegal activities like money laundering by making business ownership more transparent. Under this law, most small businesses have to report who their real owners are to a government agency called FinCEN. This means if you own a significant part of a business or have a big say in how it’s run, you’ll need to provide your details, like your name and address. This law is mainly about stopping people from using businesses to hide illegal activities.

The CTA mandates that dentist-owned practices, among other small businesses, submit detailed disclosures about ownership and control. Compliance is not optional; failure to adhere results in hefty, accumulating penalties.

Key Aspects of the CTA for Dentist-Owned Entities:

• Mandatory Reporting Requirements: Existing businesses, including dental practices, must file disclosures detailing personal information of individuals owning 25% or more of any profit ownership class or exerting substantial control. Information required includes names, birth dates, addresses, and photographs.
• Updating Information: Changes in ownership or control information must be reported within 30 days.
• Alignment with Other Regulatory Filings: The CTA’s reporting requirements intersect with other regulatory filings. Consistency across disclosures is crucial to avoid severe consequences, such as sanctions or loss of licensure.
• Limited Accessibility of Information: While CTA reports are not public, they are accessible to law enforcement and, with customer consent, financial institutions. They are not subject to Freedom of Information Act requests.
• Penalties for Non-Compliance: Failing to comply can result in a fine of $500 per day, underscoring the importance of timely and accurate reporting.
• Deadlines for New Entities: Newly established entities have specific deadlines for their initial CTA reports. Entities formed on or after January 1, 2024, must file within 90 days of formation, while those formed after January 1, 2025, have 30 days. Existing entities formed before January 1, 2024, must comply by January 1, 2025.

In summary, dentist-owned businesses must take immediate and proactive steps to comply with the CTA. The financial risks of non-compliance are substantial. Consulting with a legal team is crucial for ensuring accurate and timely reporting. For legal guidance on CTA compliance or other issues affecting your dental practice, contact our healthcare attorneys at 212.668.0200 or info@mdrxlaw.com.