New FinCEN Reporting Requirements for Some Companies in 2024
The Financial Crimes Enforcement Network (FinCEN) is a Treasury Bureau with key requirements for many financial businesses. FinCEN regulations aim to prevent money laundering and other financial offenses. When necessary for a business, complying with FinCEN regulations is critical to avoid legal or even criminal consequences.
Beginning January 1, 2024, new requirements go into effect for reporting certain information to FinCEN, specifically beneficial ownership information. The requirements will apply to most corporations, limited liability companies, and other entities created by filing a document with a Secretary of State.
If you have questions about compliance with these new requirements, you should speak with an experienced business attorney as soon as possible.
If your business is already established or you will register it before January 1, 2024, you must issue your beneficial ownership report by January 1, 2025. For companies registered after the start of 2024, the reporting must occur within 30 days of the Secretary of State filing.
For business owners wanting to get ahead of the requirements, FinCEN is not yet accepting early reports. This is because the reporting procedures and systems are still under development. Eventually, FinCEN will release specific instructions for reporting electronically through a secure system on the agency’s website. There will be no fee for reporting this information.
The current guidance indicates that reporting companies will need to submit the following information:
- The legal name of the company
- Any doing business as (d/b/a) or trading as (t/a) names
- Jurisdiction of registration or formation
- Current address of the company’s principal place of business (for domestic companies) or the current address where the company conducts business in the U.S. (for foreign companies)
- Taxpayer identification number (TIN)
- Whether this is the initial report or an update or correction to a previous report
- Information for each beneficial owner of the company, including each individual’s name, address, date of birth, government ID or passport identification number and issuing agency.
This is the main question many company managers have. A beneficial owner is:
- Anyone who directly or indirectly controls or owns at least 25 percent of the company’s ownership interests
- Anyone who directly or indirectly exercises “substantial control” over the organization
Owners of 25 percent or more, senior officers, and any other individual who directs or influences substantial business decisions will need to be reported as beneficial owners. We can help you examine who must submit their information as part of your report.
While FinCEN predicts that most reporting companies will have straightforward reports, many business owners might be unsure of how to fully comply with this requirement. As business attorneys, our professional corporation will also have to submit a report, and we are prepared to assist our small business clients with the same.