You likely haven’t heard of a Beneficial Ownership Information Report, but this new law and filing requirement applies to most small businesses and LLCs, and the penalties for non-compliance are steep. It’s part of the Corporate Transparency Act, which took effect January 1, 2024, aimed at curbing illicit finance. It requires most small businesses and LLCs to report information about the individuals who ultimately own or control them (“beneficial ownership information report”) to the Financial Crimes and Enforcement Network (FinCEN).
Filing is secure and free. Companies that are required to comply (“reporting companies”) have the following due dates:
- Existing companies: Reporting companies created or registered to do business in the United States before January 1, 2024 must file by January 1, 2025.
- Newly created or registered companies in 2024: If your company is created and registered to do business in the United States in 2024, you have 90 calendar days to file after receiving actual or public notice that the company’s creation or registration is effective.
- Newly created or registered companies in 2025: If your company
is created or registered on or after January 1, 2025, you have 30
calendar days to file after receiving actual or public notice that the
company’s creation or registration is effective.
Beneficial ownership information reporting is not an annual requirement. A report only needs to be submitted once, unless information needs to be updated or corrected. Generally, reporting companies provide four pieces of information about each beneficial owner:
- Name
- Date of birth
- Address
- Identifying number and issuer from a non-expired U.S. document:
- Driver’s license
- Passport
- Identification document issued by a state, local government or Indian tribe
There is ongoing litigation regarding the Corporate Transparency Act’s constitutionality. However, FinCEN is continuing to implement the CTA, and reporting companies are still required to comply with the law as it is currently written. Please be advised that Sarah Shaw CPA & Business Advisor cannot file Beneficial Ownership Information Reports on behalf of clients. Clients are responsible for filing their own Beneficial Ownership Information Reports or for consulting with legal counsel to do so.
FinCEN also publishes these helpful resources:
