As a business owner or member of the business community, I hope that you have already caught wind of the federal requirements for business registration that were implemented January, 2024. All businesses (with VERY narrow exception) must now register information about their “beneficial owners” by specific deadline.
Businesses created before January 1, 2024: Must register by January 1, 2025
Businesses created between January 1, 2024 and before January 1, 2025: 90 days after entity creation
Businesses created after January 1, 2025: 30 days after creation
Strict deadlines also apply to reporting of changes to the beneficial ownership. Failure to file carries potential fines of up to $500 per day, and potential criminal sanctions. This reporting system has been created to control money laundering and terrorist financial activities, so the penalties are real!
Really? All businesses? Yes, (most) all businesses need to register information about their beneficial owners. There are very limited exclusions, so if you think you may be exempt, please check with legal counsel first. LLCs, corporations, and 501c3s are all required to report.
Registration is easy and you should be prepared to provide the addresses, dates of birth and ID numbers from applicable ID forms (passport, driver’s license, etc.) for each “beneficial owner”. Once this information is collected, it should only take about 10 minutes to complete the online form, here. There is currently no filing fee to complete the registration.
But wait!! There’s more: “Beneficial Owner” is a deceptive term, and may be broader than you think. This term describes not only individuals who have an ownership stake of 25% or greater, but also individuals or companies who “exercise substantial control” over the entity. “Beneficial Owners” don’t have to own any portion of the company to require registration of their information. Individuals with substantial control can mean:
- The individual is a senior officer (the company’s president, chief financial officer, general counsel, chief executive office, chief operating officer, or any other officer who performs a similar function).
- The individual has authority to appoint or remove certain officers or a majority of directors (or similar body) of the reporting company.
- The individual is an important decision-maker for the reporting company.
- The individual has any other form of substantial control over the reporting company.
If your spouse or business coach has influence regarding your company’s decision making process, they may be a beneficial owner requiring registration. Each determination is made on a case by case basis, depending on the circumstances within your company and relationships. As always, if you have any questions about who might be considered a “Beneficial Owner” of your entity, please seek legal advice.
Caroline Kert and art.biz.life Legal Counsel are happy to help you and your colleagues navigate this process. Through November 1, 2024, art.biz.life is offering a special consult fee of $165 (a 10% discount) for FinCEN reporters. This includes up to 30 minutes consultation to answer questions regarding whether your business is a reporting company, who is a beneficial owner, and assistance with specific filing questions.
Inquiries regarding legal support with your FinCEN questions can be made through the art.biz.life Legal Counsel website:
Creative Legal, LLC 