Commencing in 2024, any corporation, LLC and LLP with 20 or less full-time employees that reports $5,000,000 or less in gross receipts on their Federal tax returns must report certain information about the entity, its equity holders or beneficiaries and its directors, managers, trustees and officer to the Financial Crimes Enforcement Network ("FinCEN") of the Department of Treasury.
The required information to be reported to FinCEN includes:
· the legal name of the entity,
· tradenames and d/b/a of the entity,
· current address of its principal place of business,
· state of formation, and
· employer ID number (EIN).
The disclosures must also include the names of all beneficial owners, their addresses, dates of birth and identifying numbers, such as passport or driver’s license numbers. Such disclosures also need to be made for the entity’s board members, managers of LLCs, and trustees of trusts exercising control over a reporting entity and key officers.
It should be noted that there are a number of exclusions as to what entities, beneficial owners and officers/directors/trustees/managers are required to engage in said reporting. For those covered by this new Federal disclosure requirement, failure to either comply with the reporting requirements or truthfully report information is unlawful.
Time For Reporting
Starting in 2024, all US entities must file a beneficial ownership report with FinCEN, unless exempt. Existing businesses have one year to comply, and new businesses must act within 90 days of formation.
Penalties For Non-Reporting
Timely reporting of ownership changes is mandatory. Non-compliance risks daily penalties of up to $500 and potential legal consequences, including jail time.