What Business Owners Need to Know About New Reporting Rules

The U.S. government has introduced a new rule that may impact your business. Starting this year, many companies will need to file a report with the Financial Crimes Enforcement Network (FinCEN). FinCEN is a branch of the U.S. Treasury Department that works to prevent financial crimes like money laundering and fraud. This new rule is part of an effort to make business ownership more transparent.

If you’re a business owner, here’s what you need to know.

What’s Changing?

Businesses must now report information about their "beneficial owners." A beneficial owner is someone who owns 25% or more of the business or has significant control over its decisions. This rule applies to most corporations, LLCs, and other entities that file paperwork with a state or tribal government to operate.

Who Needs to File?

If you formed a corporation, LLC, or similar entity, chances are you need to file. However, some organizations, like publicly traded companies or certain nonprofits, don’t have to. If you’re unsure, consult your legal advisor.

What’s the Deadline?

  • Businesses created after January 1, 2024, must file within 30 days of formation.
  • Existing businesses must file by January 1, 2025.

What Information Is Required?

The report will include:

  • Your business’s name and address.
  • Names, birthdates, addresses, and ID numbers (e.g., from a driver’s license or passport) for your beneficial owners.

How to Prepare

  1. Confirm if this applies to your business. Most small businesses will need to file.
  2. Gather the required details. Ensure you have all the information about your business and its owners.
  3. Consult an expert. Talk to your attorney or legal advisor for personalized guidance.

For more information about this rule and how to comply, visit FinCEN’s official website: Beneficial Ownership Information.

This is a big change for many businesses, so make sure you’re ready. Start gathering your information now to meet the deadlines and avoid penalties!