New FinCen.gov Updated Requirements To Register Your Business in 2024

Important New Business Registration Requirement Start in 2024

Understanding the New Business Registration Requirement

There is an important new business requirement starting on January 1st 2024. Companies must report information about their business owners. They must submit the information to the Financial Crimes Enforcement Network (FinCEN), a U.S. Department of the Treasury bureau.

Companies are required to disclose information about their beneficial owners to the U.S. Department of the Treasury because, in 2021, a bipartisan agreement in Congress led to the enactment of the Corporate Transparency Act. This legislation introduced a reporting mandate for beneficial ownership information, aiming to impede the ability of malevolent parties to obscure their identities and benefit from unlawfully acquired assets using shell companies or complex ownership entities.

Which Entities Are Obligated to Disclose Information?

Reporting organizations or reporting companies are mandated to submit reports. These entities might need to gather data from their beneficial owners and convey to FinCEN.

Your business could be classified as a reporting company and be required to disclose details about its beneficial owners if your business is either:

• Corporation, a Limited Liability Company (LLC), or has been established within the United States through the submission of documents to a secretary of state or an equivalent state or tribal authority; or
• An overseas company that has been recorded to conduct business within any state of the U.S. or tribal territory following such a document submission.

Who Is Exempt from Reporting?

There are 23 exemptions of entities that are not subject to the reporting requirements for beneficial ownership information. This list of exempt entities encompasses publicly listed companies, nonprofit organizations, and certain sizable operational companies.

Please check FinCEN’s Small Entity Compliance Guide for further information about each of the 23 exemptions.

Detailed Filing Deadlines

Important new filing deadlines have been announced that will impact many companies. It is important to learn about and prepare to comply with these changes.

• Companies that existed before 1/1/2024 must comply with the new requirement on or before 1/1/2025.
• For companies formed in 2024, a 90-day window from the time of formation has been provisioned for registration. Consider this as a three-month window of opportunity to align with the requirement.
• For companies formed in 2025 and onwards have an even narrower window of 30 days from their formation date to comply with the registration requirements. This regulation underscores the need for quick action and organized planning.

As the new business registration requirement takes effect in 2024, it is critical for companies to understand if they need to comply. Review this post’s key details to determine your obligation and necessary actions, particularly around the reporting deadlines.

Ensure your business is prepared to provide the required beneficial ownership information to avoid penalties.