Written by via usworker.coop/blog
The USFWC and DAWI are currently researching resources to pull together for our members and partners to understand the Corporate Transparency Act. This is a new piece of federal legislation that comes into effect on January 1, 2024, and will impact most small businesses in the U.S.
What is the The Corporate Transparency Act (CTA)?
Enacted in 2021, the Corporate Transparency Act was passed to enhance transparency in entity structures and ownership to combat money laundering, tax fraud, and other illicit activities. It’s designed to capture more information about the ownership of specific entities operating in or accessing the U.S. market. The Corporate Transparency Act established the Beneficial Ownership Information program (BOI program), and is overseen by FinCen, the Financial Crimes Enforcement Network which is a part of the U.S. Department of Treasury.
As a membership organization, the USFWC is working alongside our research and development partner, the Democracy at Work Institute, and other ecosystem partners to bring together information on the BOI program and share it with our members and partner organizations.
Why is this important for worker co-ops?
The Beneficial Ownership Information program, requires reporting on business owners and individuals who exercise significant control over a business. For businesses that are not cooperatives, this is a relatively straightforward reporting requirement for the owner(s) of the business. Because cooperatives have a broad-based ownership model, it is not clear currently who exactly within the business ownership needs to report. For worker cooperatives, this can be especially tricky to understand.