FinCEN Beneficial Ownership Information Report
As we mentioned in our previous newsletter, starting January 1, 2024, a significant number of businesses are required to comply with the Corporate Transparency Act (CTA). The Act requires LLC’s, corporations, and other companies to report information on who owns and controls the company to the Financial Crimes Enforcement Network (FinCEN). The report is known as the Beneficial Ownership Information Report. For entities formed prior to January 1, 2024, this information must be reported by January 1, 2025. For entities formed after January 1, 2024, the report will be due within 90 days of formation of the new entity. Updated reports are required for any changes within 30 days of the change, once the initial report is filed. It is anticipated that 32.6 million businesses will be required to comply with this reporting requirement.
While we are generally recommending waiting to see what additional guidance is issued, here are some key takeaways you need to know:
1. Information sources for this reporting requirement – the website https://www.fincen.gov/boi contains information about the entities required to file, individuals considered beneficial owners, information required to be reported, and a link to the online forms. The SKDO website also has information and links to additional information on these reporting requirements and expectations.
2. Watch out for scammers – Companies have official sounding names such as the “Bureau of Official Records”, the “office of Corporate Registration” and others, are reaching out to company owners offering to complete, for a fee, the report to comply with the new law. The BOI report requires the disclosure of confidential personal information of owners. The online report does not have a filing fee. Please refrain from utilizing these services as there are reports of scammers using this new requirement to gain access to your confidential information.
3. Recommend waiting for additional guidance before filing – Since this requirement is brand new and the rules and forms have only recently been finalized, we are taking time to review the rules and any additional guidance, changes and modifications that become available prior to recommending completing the online forms. New entities will need to timely comply with the new law within 90 days of creation. As of January 10, 2024, a bill has passed the House of Representatives to extend the reporting deadlines, but it is not clear when or if the Senate will consider this bill. NOTE- all businesses that are required to file this report should do so by the filing deadlines. The fines and penalties for noncompliance can be severe.
4. We are not responsible for filing any FinCEN Beneficial Ownership Information Report. A separate engagement letter will be required for any SKDO involvement for your FinCEN BOI filing requirements. Watch for additional newsletters for additional guidance as it becomes available to us.