Wolters Kluwer survey reveals misconceptions among small businesses that are subject to Beneficial Ownership reporting
One-third of respondents mistakenly believe Corporate Transparency Act rule doesn’t apply to their businesses
As a year-end filing deadline approaches, confusion remains high among small businesses that are subject to beneficial ownership reporting under the Corporate Transparency Act (CTA). A new survey by Wolters Kluwer reveals that 33% of respondents representing small businesses that meet the reporting criteria and should be filing this year mistakenly don’t believe that beneficial ownership information (BOI) reporting applies to their organizations.
While 39% acknowledge the applicability of the rule to their organizations, 23% confessed their uncertainty on its relevance. When asked about the status of their BOI filing, 16% have no intention of filing beneficial ownership details, rising to 36% among businesses with annual revenues below $500,000. A summary of the survey findings is available online.
“One of the biggest takeaways from our survey is the disconnect among many small businesses about their eligibility status and intent to file BOI details by year-end,” said Rupak Venugopal, Vice President, Beneficial Ownership, Wolters Kluwer Financial & Corporate Compliance. “A significant portion of respondents mistakenly believe their organizations’ annual revenue or employee counts make them too small for eligibility. We strongly encourage all businesses to familiarize themselves with BOI reporting requirements and the specific exemptions listed by the CTA and the Financial Crimes Enforcement Network (FinCEN).”
Venugopal points to Wolters Kluwer’s Bizfilings Beneficial Ownership Eligibility Quiz as a means of helping small businesses quickly understand whether they need to file.
Conducted June 21-July 1, the survey of 302 U.S. small businesses collected input from organizations with less than $5 million in annual revenues and fewer than 20 employees.
The survey also explores the resources small businesses are tapping for BOI compliance, with law firms being relied upon three times more than CPA/accounting firms. Among the top sources cited in having helped generate awareness of the reporting rule among small businesses, law firms led (32%), followed by websites (27%) and word-of-mouth (22%).
Wolters Kluwer’s BizFilings Beneficial Ownership Information Report solution helps small businesses understand basic reporting requirements, file with confidence, and avoid penalties for non-compliance.