With only 10 weeks left in 2024, business owners and managers need to be aware of a new federal law requiring many business entities in the United States to file Beneficial Ownership Information with the Financial Crimes Enforcement Network (FinCEN) within the U.S. Department of the Treasury. While the filing deadline is the end of the year now is the time for business entities to start preparing.
The Corporate Transparency Act (CTA) was enacted with bipartisan support in 2021 with the aim of combating criminal activity including tax fraud, money laundering, and financing for terrorism. Under the new law, businesses that meet certain criteria must submit information to FinCEN providing identification details for individuals associated with the reporting company.
The individuals that must be included in the report are recognized as a Beneficial Owner who has either directly or indirectly a significant ownership stake in a company. These individuals are identified in three ways:
· Owns at least 25% of the company.
· Has a major influence on the company’s decision-making or operations; or
· Has a similar level of control over the company’s equity.
FinCEN has released an FAQ document for reference and U.S. Chamber of Commerce shared this article providing additional insight and information. One item of note is that every separate legal entity that has been recognized by a Secretary of State in the U.S. that meets the criteria must file their initial report by the end of this year. If you are a newly formed business in 2024, you must file within 90 days, so don’t delay.
This post was originally published on here
