| BEGINNING JANUARY 1, 2024, most small businesses in the United States will be REQUIRED under penalty of law to report to the U.S. government about who owns and controls them pursuant to the Corporate Transparency Act, enacted in 2021. This is a FEDERAL requirement.
These businesses must report to the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury. Click here to visit their website to make your report beginning 1/1/2024.
WHY?
• To protect national security and commerce
• To counter money laundering, terrorism financing and other crimes
• To bring the US in compliance with international standards
WHO HAS TO REPORT?
• Any corporation, LLC or other entity that has filed with a Secretary of State
• There are 23 exemptions, but they are very limited, MOST small businesses will be required to report
• Most companies should be able to report without assistance from their attorneys and tax advisors
WHEN IS THE REPORT DUE?
• If company was formed BEFORE 1/1/2024, you must report by 1/1/2025
• If company forms effective 1/1/2024 or AFTER, you must report WITHIN 90 DAYS of formation
• ADDITIONALLY, if your company has any change in ANY information it has reported, it MUST update its report within 30 days of the change
Due to the likely stresses that the FinCEN server will face beginning January 1, 2024, we strongly advise our clients formed prior to 1/1/2024 to wait until later in the year to report.
ANY FEES? IS INFO AVAILABLE TO THE PUBLIC?
• There is NO FEE for the report or any changes
• This is NOT a public database – only for federal government usage, including IRS
WHAT INFO MUST BE REPORTED?
• Companies must provide basic info about the entity, the Company Applicant (for new entities formed on or after 1/1/2024), and its Beneficial Owners
• Legal names, addresses, and dates of birth
• Copies of drivers licenses or passports
STIFF PENALTIES FOR NON-REPORTING OR FALSE REPORTING!
• $500/DAY CIVIL FINES for each day reports are not filed
• $10,000.00 CRIMINAL fine and up to TWO years jail time for filing FALSE INFO or failing to provide information
HELPFUL LINKS
Main Website for FinCEN – Contains link to file your report, access to helpful information.
Extremely helpful entity compliance guide – Details on reporting with FAQs, flow charts, etc. Very helpful.
FAQs – Quick list of most questions you will have about reporting.
Request a FinCEN Identification Number – This is highly recommended if you have interests in multiple businesses. |
