All business owners understand the importance of complying with federal and state requirements when completing things like annual reports, payroll and other administrative tasks. Navigating through numerous rules and filing various reports can be overwhelming. Sumsion Business Law is dedicated to helping your team stay on top of all entity compliance requirements. Here, we highlight the Corporate Transparency Act which mandates changes to the beneficial ownership information requirements in 2024.
In 2021, political representatives from both sides came together to pass the Corporate Transparency Act, aimed at detecting, combating and preventing illegal financial activities. This act mandates that companies file beneficial ownership information with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), the bureau that oversees the security of our nation’s financial systems. The enforcement of this act commenced on January 1, 2024. Unlike an annual requirement, reporting beneficial ownership information is a one-time filing aimed at enriching FinCEN's database with details about individuals controlling organizations in the U.S. However, if a company needs to revise or amend the information, they must submit a new filing reflecting the updated details.
FinCEN requires the following information about each beneficial owner to be included in the report:
- Name
- Date of birth
- Address
- The identifying number and issuer from either a non-expired U.S. driver’s license, a non-expired U.S. passport, or a non-expired identification document issued by a State (including a U.S. territory or possession), local government, or Indian tribe. If none of those documents exist, a non-expired foreign passport can be used. An image of the document must also be submitted.
FinCEN also requires information about the company itself. This includes the following:
- Name
- Address
If the reporting company was created on or after January 1, 2024, information regarding the individuals who formed the company is also required in the report.
Companies created or registered in the U.S. before January 1, 2024 must file by January 1, 2025. All companies created or registered in the U.S. after January 1, 2024 must file within 90 days of registering.
How do I file my report? Unlike filing most reports, this one is simple! FinCEN’s Small Entity Compliance Guide provides business owners with a step-by-step guide on how to file. Filers can also find informational videos, FAQs, and more on FinCEN’s website.
Contact Sumsion Business Law to consult with our expert attorneys regarding any questions you may have related to the filing process.
