If you have an LLC or other business entity, you should be aware of important new changes to your reporting requirements. Last year, the Financial Crimes Enforcement Network, or FinCEN, finalized new rules.
FinCEN is a bureau of the US Department of the Treasury, and it aims to combat money laundering, financing terrorism here and abroad, and other illicit uses of our financial systems.
To aid in that goal, FinCEN finalized rules for nearly all business entities, including single-member LLCs, partnerships, and subchapter-S corporations. The new rule states that as of January 1 of 2024, “reporting companies” must file a one-time report with FinCEN that provide identifying information about themselves, their “beneficial owners” and their “company applicants.”
Nearly all business entities fall under this rule, as it applies to any “corporation, LLC, or other entity created by the filing of a document with a Secretary of State or similar office or formed under the law of a foreign country and registered to do business by the filing of a document with a Secretary of State or similar office.”
If your business entity was created before January 1, 2024, you have one year – until January 1, 2025 – to file this report. However, all newly-created businesses must file their Beneficial Ownership Information (BOI) report within 90 calendar days of the creation of the entity.
You should work with your lawyer to ensure the BOI report is timely and correctly filed to avoid future corrections or potential penalties. You will need your full legal name, any trade names your business has, your principal place of business, and your Employee Identification Number (EIN) you received from the IRS upon business creation. You will also have to provide identifying documentation for each Beneficial Owner of your company, which includes their full legal name, date of birth, and a passport, driver’s license, or state-issued ID.
Once you complete your BOI report, you will receive a one-time FinCEN identifier for any future needs.
Compliance is easy, but it is also mandatory. Failure to report could result in heavy civil penalties or even criminal charges. Contact your attorney to assist with this important federal regulation so your attorney can keep you, your business partners, and your business in compliance at all times.