Are You Prepared for Business Ownership Information Reporting?

Starting January 1, 2024 (but not before), corporations, LLCs, and other entities formed under state law (domestic reporting companies) or similar entities formed under foreign law and registered to do business in the U.S. (foreign reporting companies) must report to the Treasury’s FinCEN their beneficial ownership, unless they are exempt. Disclosure is required for a beneficial owner, who is any individual (1) who directly or indirectly exercises “substantial control” over the reporting company, or (2) who directly or indirectly owns or controls 25% or more of the “ownership interests” of the reporting company. Failure to do this can result in civil or criminal penalties. A Wolters Kluwer CT Corporation survey found that less than half (43%) were only 25% to 50% prepared to comply. Check the FinCEN’s guide for small businesses to determine whether you’re subject to reporting, when you have to report, and how to do it. #IdeaoftheDay