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Corporate Transparency Act

Corporate Transparency Act & Community Associations

The Federal government has a new law – the Corporate Transparency Act – that was created to combat criminal activity including tax fraud, money laundering and terrorist support by businesses. There is an exception for a non-profit 501(c)(3) organization, but community associations are not in this tax status – and no current exception exists for community associations.

What does this mean? Associations in Florida and across the country need to comply by January 1, 2025. To do so the Association must disclose their “beneficial owners.”  While the term “beneficial owner” invokes the idea of a person who makes a profit from a business in the case of an association an officer and director would be considered the “beneficial owner.” There is some debate as to whether a community association manager may qualify as a “beneficial owner” due to their level of control of the business but that is not yet clear.

What needs to be done? The Association will need to file the required disclosure which will mean officers and directors will be required to disclose personal information including name, address, social security number, passport number and/or drivers license number with copies of the unexpired documents.

Where does this data get submitted? The data is provide to the Financial Crimes Enforcement Network (known as “FINCEN.”)

Who can complete this filing? Either the person who creates the entity (developer if a new community) or the person who is primarily responsible for the filing (president or board member or manager or association attorney).

What happens if our association does not want to complete this filing? There is a harsh penalty. If the report is not filed fines could be up to $500 per day and if the information provided is intentionally inaccurate or considered fraud the fine could be up to $250K. 

When does this get updated? Any time the “beneficial owner” changes so in the case of associations when there are new board members by election, recall or appointment. This must be done within 30 days of the change.

The PeytonBolin team will keep you up to date on any changes and we offer a flat fee filing service. Give us a call today! 

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