For the first time since it began surveying small businesses, law firms and other entities in mid-2023 about new U.S. beneficial ownership reporting compliance, respondents have shown a noticeable uptick in readiness. In a January 23, 2023 Wolters Kluwer poll of more than 5,100 webinar participants, 26% of those surveyed characterized their organizations’ compliance readiness as between 75% to 100%.
The same question, posed during a Wolters Kluwer beneficial ownership webinar on November 15, 2023, 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 beneficial ownership reporting requirements,” said Rupak Venugopal, Vice President, Beneficial Ownership, for Wolters Kluwer’s Financial & Corporate Compliance division.
“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,” he added.
The results shine a spotlight on current preparedness for meeting the beneficial ownership rule that took effect January 1 as part of the Corporate Transparency Act.
Respondents who indicated a total lack of preparedness dropped seven points, from 38% in November’s poll to 31% in January’s audience survey. Both polls, however, show substantial readiness increases when 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 five 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.
Wolters Kluwer has been at the forefront of efforts to generate greater awareness of and capabilities for complying with the reporting rule. It launched a Beneficial Ownership Platform solution in early January to simplify filing and ongoing compliance for both single-entity as well as multiple-entity filers. It created an easy-to-use, self-guided eligibility quiz and a library of compliance content to help ensure that impacted organizations can effectively navigate the new requirements and meet ongoing compliance obligations. More information is available on the dedicated Wolters Kluwer resource page, “Beneficial Ownership Information Compliance from CT Corporation.