There is a new law that requires many new businesses formed after Jan. 1, 2024 to file a beneficial ownership report with FinCen (part of U.S. Department of the Treasury) as part of a Corporate Transparency Act ("Act") to help the government better detect financial crimes.
This Act applies to most entity types including single member LLCs (23 types of entities are exempt, including publicly traded companies, nonprofits, and certain large operating companies), so most newly formed startups would need to file the report within 90 days of formation. There is no filing fee and the filing itself is straightforward so non-attorneys can readily file one here. Below is the reporting deadline based on when the company is registered.
Date Incorporated | Filing Deadline |
Prior to January 1, 2024 | January 1, 2025 |
January 1, 2024 to December 31, 2024 | 90 days after incorporation (making March 31, 2024 the first possible due date) |
On or after January 1, 2025 | 30 days after incorporation |
Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 days. The penalties for failing to file by these deadlines can be severe. A person who willfully violates the reporting requirements may be subject to civil penalties of up to $500 per day the violation continues. This civil penalty amount is adjusted annually for inflation so as of the date of this post, the amount is $591 per day.
A person who willfully violates the BOI reporting requirements may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file the report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.
Find full guidance here or consult legal counsel for ongoing compliance.
Comments