Starting January 1, 2024, a significant number of companies will be mandated to report details to the U.S. government about who ultimately owns and controls them. This requirement is a part of the Corporate Transparency Act and aims to unmask shell companies and protect the U.S. financial system from various illicit activities such as money laundering and fraud. It applies to many corporations, limited liability companies (LLCs), and other entities created in or registered to do business in the United States.
Key Components of the Requirement:
Reporting Entities: The new regulations require corporations, LLCs, and similar entities to report their beneficial owners to FinCEN.
Beneficial Owners: These are individuals who ultimately own or control the reporting entity.
Purpose: The aim is to enhance transparency and protect the financial system from abuse by criminals.
Resources and Compliance Guides:
FinCEN has published several resources to help businesses understand and comply with these requirements:
Frequently Asked Questions (FAQs): Updated as of December 12, 2023, these FAQs provide detailed guidance on the reporting requirement.
Guidance Materials: Includes an introductory video and a more detailed informational video, key filing dates, and key questions to assist especially the small business community in understanding their obligations.
Compliance and Submission:
Deadline: The requirement takes effect on January 1, 2024.
A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025 to file its initial beneficial ownership information report.
A reporting company created or registered on or after January 1, 2024, and before January 1, 2025, will have 90 calendar days after receiving notice of the company’s creation or registration to file its initial BOI report.
Submission Process: Detailed information on how to submit the required information to FinCEN will be provided on their website.
Small Entity Compliance Guide: This guide, available on FinCEN's website, offers comprehensive assistance for small businesses.
Fraudulent Attempts Alert:
FinCEN has warned of fraudulent attempts to solicit information from entities potentially subject to these reporting requirements. It's crucial to be vigilant against such scams and only respond to official communications from FinCEN.
Contact and Further Information:
For additional queries or concerns about the upcoming reporting requirements, businesses can contact FinCEN directly. Continuous updates and more detailed guidance are expected to be published on FinCEN's website, so it's advisable to check back frequently.