FinCEN Requirements for the Small Business Owner

Calling all business owners! There is a new federal mandate that all small business owners report their Beneficial Ownership with FinCEN. Small businesses may have new requirements under this new Reporting Rule, but fear not, our attorneys are ready to help answer any and all questions and help you with your business reporting. These reports contain information about the business itself and two categories of individuals:

1. Beneficial Owner; and

2. Company Applicants.

Generally speaking, a beneficial owner is an individual who owns or controls at least 25% of a company or has substantial control over the company, and a company applicant is an individual who directly files or is primarily responsible for the filing of the document that creates or registers the company.

The Reporting Rule, issued on September 30, 2022, implements Section 6403 of the Corporate Transparency Act. The rule describes who must file BOI reports, what information they must provide, and when they must file the reports. Simply put, the federal government is taking another step in trying to prevent fraud, embezzlement, and acts of terrorism.

The Reporting Rule is found at 1010.380 in the title 31 of the Code of Federal Regulations. Starting on January 1, 2024, BOI reports must be filed electronically using FinCEN’s secure filing system. FinCEN will store BOI reports in a centralized database and only share this information with authorized users for purposes specified by law. The database will use rigorous information security methods and controls typically used in the federal government to protect non-classified yet sensitive information systems at the highest security level.

When do I need to file a report?

1. Reports will be accepted starting on January 1, 2024.

2. Reporting companies created or registered to do business before January 1, 2024, will have additional time – until January 1, 2025 – to file their initial BOI reports.

3. Reporting companies created or registered on or after January 1, 2024, and before January 1, 2025, have 90 calendar days after receiving actual or public notice that their company’s creation or registration is effective to file their initial BOI reports. Specifically, this 90-calendar day deadline runs from the time the company receives actual notice that its creation or registration is effective, or after a secretary of state or similar office first provides public notice of its creation or registration, whichever is earlier.

4. Reporting companies created or registered on or after January 1, 2025, will have 30 calendar days from actual or public notice that the company’s creation or registration is effective to file their initial BOI reports.

Do not miss these deadlines! Come schedule an appointment for us to help you with your reporting.

*information pulled from the Small Entity Compliance Guide, Financial Crimes Enforcement Network, U.S. Department of theTreasury, Version 1.1 December 2023*