April 11th, 2024

Beneficial Ownership Information Reporting

  1. What is it?

This new law is managed by the Financial Crimes Enforcement Network (FinCEN). 

Requirement:  a one-time reporting of any owner with a 25% ownership of an LLC, Subchapter S, or a Subchapter C corporation (basically any entity requiring state registration) under $5 million in annual revenue.  Large corporations, CPA firms and certain other entities are exempt; there are a total of 23 types of businesses that are exempt.

No other reporting until the ownership of the company changes.What is involved in the registration?

Name, address, ownership participation, and drivers license of an owner of 25% or more of the company.

  1. What is the purpose of this regulation?

FinCEN is trying to track the flow of money from corporation to corporation, specifically in small businesses.  FinCEN does not report to IRS, nor is IRS a part of this registration.

  1. Is this law constitutional?

There is a class action suit at this point that may delay or even negate the legal status of this ruling.  Thus, entities are holding off on doing their registrations at this point.

  1. What are the penalties if I don’t report?

The penalties are criminal, not civil.  There is a fine of $10,000 to start with, with $100 per day additional penalties.  Also, since failure to register is criminal, there could be jail time.

  1. Should I register?

That is up to each company’s owner, just a personal decision.  However, if you decide to register, PLEASE DON’T wait until December to register.  We have a long history of knowledge that government websites can get overloaded and be off-line for long period of time with this kind of situation.  If you decide to register, do so starting the first week of November, 2024.

The website to see more information fincen.gov

Join our group by registering online at silvermoonagency.com/monthly-touch.