Starting in 2024, new reporting requirements for LLCs will come into effect under the Corporate Transparency Act, a federal law aimed at preventing money laundering. Failure to comply can result in serious consequences, including felony convictions, daily penalties up to $10,000, and imprisonment for up to two years.
To comply with these requirements, all LLC and corporation owners, including single-member LLCs, must file a Beneficial Owner Information (“BOI”) report with FinCEN (the Department of the Treasury’s Financial Crimes Enforcement Network). Rest assured, the information collected will only be accessible to authorized government authorities and financial institutions, ensuring its confidentiality.
Exceptions are made for large publicly-traded companies and businesses that meet all the following criteria: employing over 20 people, earning more than $5 million annually, and maintaining a physical presence at a US business office.
If your business is organized as an LLC or corporation, including a single-member LLC, you must complete the form by the end of 2024. For those forming a new LLC or corporation in 2024, the report must be completed within 30 days. Additionally, any changes to beneficial ownership, name, or address must be reported within the same timeframe. However, annual reporting is not required.
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To file, companies will need to provide essential information, including
- legal and trade names;
- jurisdiction of formation;
- and taxpayer identification number.
Each beneficial owner and company applicant must also provide
- their legal name;
- date of birth;
- and an identifying number from a government-approved document like a driver’s license or passport.
FinCEN Issues Updated FAQs
FinCEN updated its BOI FAQs to include new questions about the reporting process, reporting companies, beneficial owners, company applicants, reporting requirements, initial reports, and reporting company exemptions. See updated FAQs here.
Rest assured that we will monitor this requirement closely and are available to answer any questions you may have. While these reports don’t require the involvement of a CPA, if you want to offload that to us, we’re always happy to help. Click here to get started.