What to Know About the New Corporate Transparency Act 

 Posted on September 25, 2023 in Condominium & Homeowner Association Law

As we enter the autumn season and approach 2024, condominium associations across the United States are readying themselves for significant change in legislation that is likely to enhance corporate transparency and combat illegal activities, such as money laundering and various other illicit activities. This comprehensive law, the Corporate Transparency Act, or the “CTA” as it is commonly referred to, will have far-reaching implications for many kinds of business entities, particularly condominium associations. For legal guidance regarding how this new law will impact condominium associations, contact a lawyer to ensure you have the legal protection necessary to have a complete understanding of this new law and what it will entail. 

Understanding the Corporate Transparency Act

The CTA was created to address serious concerns regarding the misuse of corporate structures for criminal purposes. The law mandates that certain corporations, including condominium associations, must disclose their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). This includes the identities of people who directly or indirectly own or control 25 percent or more of the association’s interests.

Enhanced Transparency for Condominium Associations

Before the CTA came into existence, condominium associations often operated under a veil of secrecy, making it difficult to identify the true owners behind these legal entities. The CTA is tasked with bringing significant change by requiring condominium associations to provide detailed ownership information, promoting increased transparency. This will not only help combat money laundering and other illegal activities but also foster greater accountability and trust among influential stakeholders. 

What the CTA Means for Condominium Associations

While promoting transparency, the CTA also places additional compliance responsibilities on condominium associations. These associations need to implement robust systems and procedures to identify beneficial ownership information accurately. Hiring legal professionals and leveraging technology solutions can assist in streamlining the compliance process, ensuring adherence to the new requirements. 

Understanding the Impact on Financial Institutions

The CTA will also have implications for financial institutions that often interact with condominium associations. Banks and other financial institutions will be required to verify the accuracy of the disclosed ownership information and report suspicious activities to the Financial Crimes Enforcement Network (FinCEN). This will enhance their ability to identify potential risks associated with money laundering and illicit financing. 

Contact an Arlington Heights Condominium Law Attorney

If you are wondering how the CTA may affect your condominium association, contact the skilled Cook County condominium lawyers with Dickler, Kahn, Slowikowski & Zavell, Ltd.. Call 847-593-5595 for a private consultation.