Navigating FinCEN Compliance: Quickly Approaching Deadlines for Businesses formed before 2024
A variety of businesses, such as LLCs, LLPs, partnerships, and corporations, formed before January 1, 2024, have until January 1, 2025, to file their initial report with the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
The Corporate Transparency Act (CTA) introduced substantial new reporting obligations for a wide array of corporate entities. Generally, any domestic entity formed by filing documents with a secretary of state or similar office – such as corporations, limited liability companies, limited partnerships, and limited liability partnerships – is considered a reporting company subject to these requirements. The CTA also applies to foreign entities registered to conduct business through similar filings.
The CTA requires reporting companies to file a beneficial ownership information report (BOI Report) with FinCEN. For reporting companies formed before January 1, 2024, the BOI Report must provide information about the beneficial owners of the entity. A beneficial owner is any individual who, directly or indirectly, either (1) exercises substantial control over a reporting company, or (2) owns or controls at least 25 percent of the ownership interests of a reporting company. The terms “substantial control” and “ownership interest” are broadly defined.
Reporting companies must report the following information: full legal name and any trade or “doing business” names; address; jurisdiction of organization of domestic reporting company or jurisdiction where foreign reporting company first registers; and IRS, TIN, EIN for a domestic reporting company, or similar tax identification number for a foreign reporting company.
Each beneficial owner must report the following information: full legal name, birthdate, home address, and a unique identifying number and issuing jurisdiction from an acceptable identification document, such as a passport, driver’s license, or other government-issued identification document (and an image of such document).
Reporting companies established prior to January 1, 2024, have until January 1, 2025, to file initial BOI Reports with FinCEN. Failure to comply with the initial and ongoing reporting requirements can lead to civil and criminal penalties, including a maximum civil penalty of $500 per day (up to $10,000) and imprisonment for up to ten years.
Note – Businesses established before 2024 that are located in areas designated for FEMA and IRS relief due to Hurricane Milton may qualify for a six-month filing extension.
Resources
Additional information is available on the FinCEN website at https://www.fincen.gov/boi. HSB lawyers can assist you in determining whether you are required to file a beneficial ownership report or qualify for an exemption from filing, and, if a filing is required, in determining the persons for whom information is required.
We provide an in-depth outline of the Corporate Transparency Act here:
The Corporate Transparency Act – New Federal Requirements Effective January 1, 2024
For questions or assistance, please contact Sterling Busbee, Tyler Gilliam, or Mallory Vincelli.
The CTA requires reporting companies to file a beneficial ownership information report (BOI Report) with FinCEN. For reporting companies formed before January 1, 2024, the BOI Report must provide information about the beneficial owners of the entity. A beneficial owner is any individual who, directly or indirectly, either (1) exercises substantial control over a reporting company, or (2) owns or controls at least 25 percent of the ownership interests of a reporting company. The terms “substantial control” and “ownership interest” are broadly defined.
Reporting companies must report the following information: full legal name and any trade or “doing business” names; address; jurisdiction of organization of domestic reporting company or jurisdiction where foreign reporting company first registers; and IRS, TIN, EIN for a domestic reporting company, or similar tax identification number for a foreign reporting company.
Each beneficial owner must report the following information: full legal name, birthdate, home address, and a unique identifying number and issuing jurisdiction from an acceptable identification document, such as a passport, driver’s license, or other government-issued identification document (and an image of such document).
Reporting companies established prior to January 1, 2024, have until January 1, 2025, to file initial BOI Reports with FinCEN. Failure to comply with the initial and ongoing reporting requirements can lead to civil and criminal penalties, including a maximum civil penalty of $500 per day (up to $10,000) and imprisonment for up to ten years.
Note – Businesses established before 2024 that are located in areas designated for FEMA and IRS relief due to Hurricane Milton may qualify for a six-month filing extension.
Resources
Additional information is available on the FinCEN website at https://www.fincen.gov/boi. HSB lawyers can assist you in determining whether you are required to file a beneficial ownership report or qualify for an exemption from filing, and, if a filing is required, in determining the persons for whom information is required.
We provide an in-depth outline of the Corporate Transparency Act here:
The Corporate Transparency Act – New Federal Requirements Effective January 1, 2024
For questions or assistance, please contact Sterling Busbee, Tyler Gilliam, or Mallory Vincelli.
