Did you know that in January 2024, new regulations were issued that require businesses to report information about their beneficial owners (the individuals who ultimately own or control the company) to the Financial Crimes Enforcement Network (FinCEN)? These Beneficial Ownership Information (BOI) regulations aim to prevent money laundering, fraud, and terrorism financing, and are required of all corporations and LLC entities that do business in the United States (save for these exemptions).
What's Required?
By the end of 2024, your business will need to file a report with FinCEN listing each of the individuals that meet the criteria as a beneficial owner that owns or controls at least 25% of the reporting company’s ownership interests. Don’t let the word “owner” trip you up—in this case, control can come in the form of other roles an individual fills, regardless of whether they own shares or hold membership in the organization. The good news? FinCEN has a BOI Small Compliance Guide to help you understand the details, and you can e-file for free directly via the FinCEN website.
For a step-by-step guide, check out this helpful video: How to File. Remember, too, that you will need to file separately for each corporation or LLC if you have more than one. If that is the case, check out the option to create a FinCEN ID for individuals who own or control multiple entities to help streamline the process.
Ongoing Updates
You do not need to update this annually, but one of the key points to remember is that any time your information changes—be it an address update or an expiration of identification—you have 30 days to notify FinCEN. For example, if you use your driver’s license or passport as documentation and either expires or changes, it’s your responsibility to update your filing promptly. To streamline this process, consider using a document that has a longer expiration date (e.g., passport expiration dates often last longer than that of driver's licenses).
Final Thoughts
These new FinCEN requirements may seem daunting, but staying informed and proactive can help ensure your business remains compliant and avoids significant fines. Take the time to file your reports before the end of 2024, and remember to keep your information updated. By doing so, you’ll contribute to a safer financial environment while protecting your business.