New beneficial ownership reporting guidance issued

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:

Sign up for Spidell’s upcoming live webinar, New Mandatory Ownership Reporting Requirements, on October 19 and learn all you need to know about these new reporting requirements. Click here and register today.