Starting January 1, 2024 through January 1, 2025 many companies will be required to report information to the U.S. government about who ultimately owns and controls them.
A beneficial owner is any individual who, directly or indirectly exercises substantial control over a reporting company or owns or controls at least 25 percent of the ownership interests of a reporting company.
Failure to do so could come with serious consequences being that the Treasury Department’s Financial Crimes Enforcement Network has issued a regulation authorized by Congress requiring small businesses to complete this report.
Who Has to Report?
Companies required to report are called reporting companies. Reporting companies may have to obtain information from their beneficial owners and report that information to FinCEN.
Your company may be a reporting company and need to report information about its beneficial owners if your company is:
- A corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Native American tribe
- A foreign company and was registered to do business in any U.S. state or Native American tribe by such a filing.
Who Does Not Have to Report?
Twenty-three types of entities are exempt from the beneficial ownership information reporting requirements. These entities include publicly traded companies, nonprofits, and certain large operating companies.
How Do I Report?
Reporting companies will have to report beneficial ownership information electronically through FinCEN’s website: www.fincen.gov/boi
Our tax professionals are available to assist with this process and help with any questions you may have about this new process.