Starting in 2024, many newly formed entities or those newly registered to do business in the United States will be required to report to FinCEN information about their beneficial owners — the individuals who ultimately own or control a company. (31 U.S.C. §5336; 31 CFR §1010) Existing entities will also be subject to this new requirement beginning in 2025. To assist with this new requirement, FinCEN has published a Small Entity Compliance Guide and some updated FAQs.
This new guidance:
- Provides details and checklists for all 23 exemptions from the reporting requirement;
- Clarifies that for purposes of the large operating company exemption:
- “Full-time employee” means an employee who is employed an average of at least 30 hours of service per week;
- If an entity is part of an affiliated group, refer to the consolidated return to determine if the entity is over the $5 million gross receipts threshold; and
- Exclude receipts or sales from sources outside of the U.S.;
- States that entities will have 90 days to correct a mistake or omission before the civil penalties of up to $500 per day (as well as specified criminal penalties) will apply; and
- Reiterates that senior officers of an entity that fails to file a required report may be held liable for that failure.
Links to the full text of the compliance guide and the FAQs are available at:
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