Small businesses and legal and compliance professionals are increasing their levels of readiness to comply with new U.S. beneficial ownership reporting requirements, according to the results of a new poll by Wolters Kluwer CT Corporation. The results of the survey reflect responses from more than 5,100 attendees and those surveyed during a webinar hosted by Wolters Kluwer on Jan. 23.
When asked about their level of preparedness for meeting the new reporting rule, which took effect Jan. 1 as part of the Corporate Transparency Act (CTA), respondents said they are trending toward greater compliance, improving eight points compared to a similar poll Wolters Kluwer conducted in November. Twenty-six percent of those surveyed characterized their organizations’ readiness as between 75% to 100% in the January poll. The same question, when posed in November, indicated a level of just 18% readiness among 4,200 attendees.
“There is a noticeable uptick in the market, not only in terms of greater awareness but also in preparations among those who realize they are subject to the beneficial ownership reporting requirements,” Rupak Venugopal, vice president of beneficial ownership for Wolters Kluwer’s financial and corporate compliance division, said. “But despite this upward trend, there remains a considerable lack of awareness among impacted businesses, and we are working diligently to help change that dynamic through a growing ecosystem of partnerships that can provide secure and trustworthy resources to comply.”
The prevalence of respondents who indicated a total lack of preparedness dropped seven points, from 38% in November’s webinar to 31% in January’s poll. Both polls, however, showed substantial increases in readiness levels compared to a Wolters Kluwer survey from mid-2023, when 74% of respondents representing companies potentially subject to the reporting requirement indicated they had only become aware of the rule “by having taken the survey.”
The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) estimates that the rule will impact approximately 32.6 million reporting companies in 2024 alone, with 5 million new reporting companies formed and registered every year going forward. There are significant consequences for non-compliance, including fines of up to $10,000 and possible incarceration.
