If you have a small business that is structured as an LLC or corporation (including 1-person LLC and S-Corps), you likely need to file a new report with the government about who owns the business. Basically, they are worried about money laundering and want to know more about the “beneficial owner” behind these entities. Here’s the more specific language:
Your company may need to report information about its beneficial owners if it is:
1. a corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
2. a foreign company and was registered to do business in any U.S. state or Indian tribe by such a filing.
A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial beneficial ownership information report.
Embedded above is a hokey intro video. You can find more info and file at www.fincen.gov/boi. FinCEN stands for Financial Crimes Enforcement Network, part of the U.S. Treasury Department.
I did not know about this until my payroll company, Gusto, alerted me and offered to file on my behalf for an extra $49. I did some quick research and was able to do it directly through the official FinCEN.gov website for free. Took about 15 minutes.
I imagine that there are probably many other single-person LLCs that don’t know about this requirement, since they have minimal paperwork requirements and don’t even need to run payroll. The deadline is coming up on January 1, 2025, assuming your business was formed prior to this year. For new businesses, you only have 90 days after notice of creation. The penalties for not filing can be quite steep. From their FAQ:
As specified in the Corporate Transparency Act, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. However, this civil penalty amount is adjusted annually for inflation. As of the time of publication of this FAQ, this amount is $591.
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 a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.
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