FinCEN Reporting: What You Need to Know

If you own a business, you may have received emails about new requirements for reporting to the Financial Crimes Enforcement Network (FinCEN). Congress passed the Corporate Transparency Act (CTA) in 2021 as part of the National Defense Authorization Act. The law aims to prevent people and companies from hiding their ownership of businesses to do illegal activities like money laundering. Starting on January 1, 2024, private corporations, LLCs, and other business entities formed under state or tribal law must report specific information about the company and its owners to FinCEN. The initial report must be filed within 30 days of creation, if the business was formed after January 1, 2024. For businesses formed before that date, owners have until January 1, 2025, to register. If changes are made to the reports, owners have 30 days to file those changes.

Domestic vs Foreign Businesses

Are you wondering what a “domestic” business is? It’s a business created by filing a document with the Secretary of State or a similar office under the law of a state or Indian tribe. A foreign company is formed under the law of a foreign country and then registered to do business in any state or tribal jurisdiction by filing a document.

Required Information

To report your business, you’ll need to provide information about the company itself, the beneficial owners, and the applicants who filed the paperwork with the Secretary of State or tribal authorities. A “beneficial owner” is an individual who has substantial control over the business or controls at least 25 percent of its ownership interests. This includes senior officers, like the President, CEO, CFO, COO, and so on. You’ll also need to provide a copy of your driver’s license, current passport, or other identification issued by a state, local government, or tribal agency. Please remember to send a new copy of your identification when it expires.

Failure to Comply

It’s important to comply with the government’s regulations to avoid penalties. Under the CTA and the proposed regulations, it is illegal to provide false or fraudulent BOI or fail to report complete or updated BOI to FinCEN. If you don’t comply, you may face a civil penalty of up to $500 per day, and a fine of up to $10,000, imprisonment for up to two years, or both.

Where to File

To file your FinCEN BOI report, go to this website: https://boiefiling.fincen.gov/fileboir.