Staying on top of laws that affect your business is one of your most important responsibilities as a small business owner. The U.S. Government recently introduced a rule relating to business ownership, and it might impact your business.
What is Beneficial Ownership Information Reporting?
Starting January 1, 2024, certain businesses must participate in Beneficial Ownership Information Reporting. This means that a business must provide information about each individual who owns or controls it, to the Financial Crimes Enforcement Network (FinCEN). As a bureau of the U.S. Department of the Treasury, FinCEN protects the country’s financial security and prevents financial crimes.
What Information Do You Need to Report?
As a general overview, the information you’ll need to provide about each beneficial owner includes their name, date of birth, and address, as well as a form of identification. Information about your small business, such as its name and address, must also be submitted. The Small Entity Compliance Guide contains more specific details about the required information.
How to Comply with the Beneficial Ownership Information Reporting Rule
Businesses that existed or registered to do business in the U.S. before January 1, 2024, have until January 1, 2025, to file. If your business opened or registered to do business in the U.S. after January 1, 2024, you must submit your report no later than 90 days after being notified that your business’s creation or registration is effective.
It’s possible that your business won’t have to file a report if it doesn’t meet the Reporting Rule’s definition of a “reporting company.” You can find guidance about which businesses meet this definition in FinCEN’s compliance guide linked above.
The good news is that this report only needs to be submitted once. To ensure that your small business stays compliant, keep a lookout for any future updates to the requirements.