FinCen Business Reporting Requirement 

Briefest Background: As part of the effort to make it more difficult for “bad actors” to use shell companies to launder money or benefit from the U.S. financial system, Congress enacted the Corporate Transparency Act (in 2021) that becomes effective January 1, 2024. Starting January 1, 2024, businesses are required to register their beneficial owners. We have attached the most recent brochure issued by FinCEN to try to keep you informed of this requirement, however, the process for filing the required information is subject to change.  

 

Do not miss: Effective January 1, 2024, your small business has a new reporting requirement with the U.S. Treasury Financial Crimes Enforcement Network (FinCEN), which is separate and apart from your tax filings. Please do not assume you are an exception to this requirement.

 

What this means to you: You have a new filing requirement that MUST be taken care of by you directly (Beware of the fraudulent attempts to solicit information from individuals and entities!).

 

Who does this apply to: Entities (corporations, LLC’s, etc.) that register with the Secretary of State in any state, including foreign entities. See the “Small Entity Compliance Guide” (https://www.fincen.gov/boi/small-entity-compliance-guide) for a very small list of organizations that are not required to register “beneficial ownership information.”

 

Where do you file: Use the FinCEN website to file “beneficial ownership information” (https://www.fincen.gov/boi).

 

What happens if you miss the filing: The penalty for non-compliance is $500/day, up to $10,000 and two years in jail.

 

Timelines:

Entities formed before January 1, 2024 – no later than January 1, 2025

Entities formed between January 1, 2024, and December 31, 2024 – Assume within 30-days to be safe. (The literature says within 30 days in some places, within 90-days in some places.)

Entities formed on or after January 1, 2025 – within 30 days after formation.

Changes to beneficial owners – within 30 days of change.

 

Also important: The current draft of the online filing with FinCEN is relatively simple to complete, but it contains information that could compromise your identity if it were mis-used. PLEASE, do not fall from fraudulent solicitations to complete this filing on your behalf. Only the FinCen.gov website is a valid way to file this information (https://www.fincen.gov/boi.