A significant new reporting requirement started on January 1, 2024.
The Federal Corporate Transparency Act requires that most small limited liability companies and corporations must disclose the beneficial owners of equity interests in those entities. Failure to comply can result in substantial financial and potential criminal penalties. So, what should companies, their officers and directors, and stakeholders do about this?
Noncompliance is not a realistic option. Penalties for noncompliance are severe.
Key items on which to focus:
· Protect your information by obtaining a FinCEN ID number.
· Learn about your requirements for filing
· Make timely filings and update them regularly as needed
Crowley Law is very familiar with the new requirements and can help you protect your information and decide on how best to make your filings. Determining who is a beneficial owner who needs to be disclosed can be complex. Don't wait until it's too late. Contact us at (844) 256-5891 or [email protected] for a discussion with a team member.
One concern is that the filing process involves disclosure of personally identifiable information about the person making the filing. Given the number of incidents of hacking and penetration of government systems, this is a concern for filers. One way to minimize the risk of disclosure of this sensitive information is to find another way to identify the filer.
The Treasury Department through its financial crimes enforcement network website (WWW.fincen.gov ) provides a helpful alternative. Individuals may file to obtain a FinCEN identification number that can be used in filings instead of repeating the disclosure of personally identifiable information.
Obtaining an FinCEN identification number is simple.
Simply log into the FinCEN website at https://fincen.gov/boi and click on the link “Create a FinCen ID (optional)”. You can obtain the FinCEN ID there. The process involves providing information about the filer, address, telephone number and a scan of a government-issued identification card (e.g., driver license). Obtaining the ID permits a company or an individual beneficial owner to report the FinCEN ID instead of the required personal information when reporting beneficial ownership to FinCen.
Reports are now being accepted. If your company was created or registered prior to January 1, 2024, you will have until January 1, 2025 to report the beneficial ownership information. If your company was created or registered on or after January 1, 2024 and before January 1, 2025, you must report beneficial ownership information within 90 calendar days after receiving actual or public notice that your company's creation or registration is effective, whichever is earlier. Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 days of such change.
Penalties for nonfiling are severe.
Those who do not make appropriate filings are subject to potential civil penalties of up to $500 for each day the violation continues or has not been remedied. In addition, willful nonfilers are subject to criminal fines of up to $10,000 and two years' imprisonment.
Crowley Law has extensive experience in government compliance programs and can help you to determine your best path going forward.
We're here to help.