As of January 1, 2024, the US Government implemented New Business Ownership Information Reporting laws, which will require companies (both small businesses and large operating companies) to report information about their beneficial owners to the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN). The objective is to enhance company visibility, thereby reducing the likelihood of illicit activities such as money laundering. 

Does this apply to your business? 

Domestic reporting companies (any corporation, limited liability company, or other similar entity that was created in the United States by the filing of a document with a secretary of state or similar office) and foreign reporting companies (any legal entity that has been registered to do business in the United States by the filing of a document with a secretary of state or similar office) that does not qualify for any of the exemptions** provided under the Corporate Transparency Act, are required to file a BOI report. 

• Existing reporting companies (created or registered to do business before January 1, 2024), your due date to file is January 1, 2025.
• Newly reporting companies, you are required to file a report of beneficial owners within 90 days of formation.
• If there is any change to required information about your company or beneficial owners, your company must file an updated BOI report no later than 30 days after the change has occurred.
• If an inaccuracy is identified in a BOI report that has been filed, it must be corrected no later than 30 days after becoming aware of mistake.

What does this mean for you? It means that as a business owner, you'll need to provide information about individuals who ultimately own or control your company. This is known as beneficial ownership information. This requirement enhances transparency and combats financial crimes, such as money laundering and fraud. Who is considered a beneficial owner? An individual who owns or controls at least 25% of a company or has substantial control over the company. 

Who will you report this information to? The reporting will be done through the Financial Crimes Enforcement Network (FinCEN), which is a bureau of the U.S. Department of the Treasury. FinCEN is responsible for safeguarding the financial system from illicit activities and ensuring compliance with relevant laws and regulations. Filing will be done electronically. You can file a BOI report on the FinCEN website. https://boiefiling.fincen.gov/ 

Why is this important? Failure to comply with the Corporate Transparency Act can result in both civil and criminal penalties. By reporting your beneficial ownership information, you play a crucial role in promoting integrity and trust in the business community. Additionally, complying with these new laws will help protect your business from potential legal consequences and reputational risks. 

What steps should you take?

To ensure compliance with the new regulations, we recommend taking the following actions:

1. Familiarize yourself with the requirements: Take the time to understand the definition of beneficial ownership and the information you need to report. You can find further detailed guidance on the FinCEN website.
2. Gather necessary information: The Corporate Transparency Act mandates the submission of specific information under three main categories. Firstly, Reporting Company Information requires the (1) legal name, address of principal place of business, (3) jurisdiction of formation, and (4) EIN. Secondly, in Company Applicants Formation, details of the individual responsible for filing or controlling the registration must be provided, (1) including name, (2) date of birth, (3) address (business or residential), and (3) identifying document information with a scanned upload. Lastly, Beneficial Owner Information necessitates disclosure of individuals with substantial control or at least 25% ownership interest, (1) requiring their name, (2) date of birth, (3) street address, and (4) identical information as outlined in Company Applicants Formation.
3. Prepare for reporting: Create a system or process within your business to accurately report the beneficial ownership information to FinCEN. This may involve updating your internal record-keeping practices. 
4. Stay informed: Regularly monitor updates and any changes to the reporting requirements. FinCEN’s website has a surplus of information that can be incredibly helpful to you and your business.  https://www.fincen.gov/boi 

We understand that keeping up with regulations can be a challenge for small business owners, which is why we wanted to share this information with you and help if needed. If you have any questions regarding this new regulatory requirement, please visit Financial Crimes Enforcement Network’s website, or call our office at 330-779-0781 and we can set up an appointment to complete this with you and your company sometime after April 15th, 2024. 

**Exemptions (23financial: Securities reporting issuer, Governmental Authority, Bank, Credit union, Depository institution holding company, Money services business, Broker or dealer in securities, Securities exchange or clearing agency, Other Exchange Act registered entity, Investment company or investment adviser, Venture capital fund adviser, Insurance company, State-licensed insurance producer, Commodity Exchange Act registered entity, Accounting firm, Public utility, Financial market utility, Pooled investment vehicle, Tax-exempt entity, Entity assisting a tax-exempt entity, Large operating company, Subsidiary of certain exempt entities, Inactive entity. (Sole proprietorships as well).