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Deadline to Report Beneficial Ownership Approaching: Avoid Daily Fines

The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, is responsible for combatting financial crimes, including money laundering and terrorist financing. One of FinCEN’s key initiatives is the enforcement of beneficial ownership reporting requirements under the Corporate Transparency Act (CTA).

Effective January 1, 2024, businesses operating in the United States must report beneficial ownership information to FinCEN. Beneficial ownership refers to individuals who own or control at least 25% of a company or who exercise substantial control over its operations. These reporting requirements aim to increase transparency and deter illicit activities by exposing the individuals behind anonymous shell companies.

Entities such as small corporations, limited liability companies (LLCs), and other similar entities must comply unless they fall under specific exemptions, such as large operating companies with 20+ employees, $5 million in revenue, and a physical presence in the U.S.

Noncompliance carries steep penalties, including fines of up to $500 per day for each day the violation continues, capped at $10,000, and potential imprisonment for up to two years. The reporting process requires submitting identifying information about beneficial owners and company applicants, including names, addresses, dates of birth, and government-issued identification.

To prepare, consult the Small Entity Compliance Guide and watch the National Restaurant Association webinar to learn everything you need to know to file your report before the January 1, 2025, deadline. Taking these steps ensures compliance while avoiding costly penalties and supporting efforts to combat financial crimes.

https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide.v1.1-FINAL.pdf

Webinar Link: Insights from the U.S. Treasury - Beneficial Ownership Reporting Deadline Is Near | National Restaurant Association

Insights from the U.S. Treasury - Beneficial Ownership Reporting Deadline Is Near | National Restaurant Association