A new reporting rule goes into effect on January 1, 2024 requiring the filing of a special form directly online with the Financial Crimes Enforcement Network.
Single member LLC’s (even if filing Schedule C), multi-member LLC’s, S Corporations and C Corporations that are not exempt must disclose beneficial ownership:
o Within 90 days of formation of a new business in 2024; or
o By December 31, 2024 for companies that were in existence before 2024.
Beneficial owner information includes full legal name, date of birth, residential street address and copy of passport or driver’s license (picture). A beneficial owner is an individual owning 25% or more of the entity, as well as officers, board members and non-owner managers.
Penalties for non-compliance are $500 per day and up to 2 years in prison. There are very few exceptions for small businesses. Newly formed LLC’s and corporations have the biggest exposure for non-filing.
Many things surrounding this new filing requirement have yet to be clarified. However, CPA firms are being directed by their professional liability insurance providers that they are not permitted to handle these filings for their clients. Doing so may be considered the unauthorized practice of law. Please be sure that you review these rules, gather the information needed and plan to complete the forms on time. Please see your attorney regarding any questions you may have. You may also refer to https://www.fincen.gov/boi for more information. This site includes a small business guide and answers to frequently asked questions.