Effective January 1, 2024, FinCEN, a crucial U.S. Department of the Treasury division, has mandated that most small businesses operating in or registered in the United States must report information about their beneficial owners. A “beneficial owner” is defined by FinCEN as an individual who directly or indirectly exercises substantial control over the reporting company or owns or controls at least 25 percent of the ownership interests of the reporting company. This is a significant step towards enhancing national security, intelligence, and law enforcement efforts to combat money laundering, financing terrorism, and other illicit activities.
The new requirements, effective from 1/12024, are applicable to a wide range of small businesses, including corporations and LLCs. It’s important to note that these regulations are not limited to newly established businesses, but also apply to existing ones. Here are some key points to keep in mind:
- Companies established before 1/1/24 have until 1/1/25 to comply.
- If you establish a new business in 2024, you must comply within 90 days of formation.
- If you establish a new business after 1/1/2025, you must comply within 30 days of formation.
- Any updates or corrections to your beneficial ownership information must be submitted within 30 days.
The purpose of reporting is to “better enable critical national security, intelligence, and law
enforcement efforts to counter money laundering, financing terrorism, and other illicit activity” by creating a federal framework for reporting, storing, and disclosing beneficial ownership information of “reporting companies.”
The filing required gathers basic ownership and legal data, most of which can be found on your tax return and/or founding legal documents. You can file yourself directly with FinCEN here. If you need support filing your report, please reach out to your business attorney. We are happy to provide a referral if you do not have one. When searching for information or filing online, be careful to avoid third-party websites. If you file online, do so directly with FinCEN using the link provided. We cannot assist directly with this filing, but if you need help locating the required information on your tax return, don’t hesitate to reach out.
Learn more about the reporting requirements and see FAQs here. You can also review the FinCEN brochure, which comprehensively overviews the new requirements. Have questions? The Curio team is ready to help with answers.
