The U.S. Department of Treasury has implemented the Corporate Transparency Act, which requires many U.S. companies formed or operating in America to report beneficial ownership information to the department’s Financial Crimes Enforcement Network (FinCEN).
The act aims to combat illicit activity, including tax fraud, money laundering, and financing for terrorism, by capturing more beneficial ownership information for specific U.S. businesses operating in or working in the U.S. market.
The department defines an individual as a beneficial owner if he or she directly or indirectly has a significant ownership stake in a company. This person either has a major influence on the reporting company’s decisions or operations, owns at least 25% of the company’s shares, or has a similar level of control over the company’s equity, according to an article by the U.S. Chamber of Commerce.
The deadline to file Beneficial Ownership Information (BOI) Report with the FinCEN for businesses formed before January 1, 2024 is January 1, 2025. Failure to register the business could mean civil penalties of up to $591 per day, and business owners could face up to two years imprisonment, and fines up to $10,000.
Many LLCs and other businesses are required under the act to submit a report. For more information about the Corporate Transparency Act, go to www.fincen.gov/boi.
Participate in a free SCORE webinar about the issue on November 20, 2024. Reserve your spot here.