FinCEN Issues First Guidance on Reporting Requirements for Corporate Beneficial Ownership

2024-09-24 10:39:57

On March 24, 2023, the Financial Crimes Enforcement Network (FinCEN) issued its first guidance on the reporting requirements for corporate beneficial ownership, aiming to help the public, especially small businesses, better understand the beneficial ownership reporting regime.

The beneficial ownership reporting requirements were promulgated on September 30, 2022, and will take effect on January 1, 2024. These requirements mandate that corporations, limited liability companies, and other entities registered or formed in the U.S. report their ultimate beneficial owners to FinCEN.

The guidance is divided into three parts: (1) Frequently Asked Questions (FAQs), (2) a one-page summary of key timelines and issues related to reporting, and (3) an instructional video published on YouTube. These sections cover similar content, providing explanations on fundamental aspects of the reporting requirements, including but not limited to:

• Which entities are required to report their beneficial owners to FinCEN;

• Criteria for determining a company's beneficial owners;

• Information that entities need to report about themselves and their beneficial owners;

• When entities must complete their reporting;

• Whether there are exemptions from reporting;

• Who will have access to the information reported to FinCEN; and

• The fees associated with filing reports with FinCEN.

While this guidance does not replace or fully summarize the specific provisions of the law, it provides valuable assistance to small businesses in understanding the basics of the reporting requirements and preparing accordingly. FinCEN also noted that it will release additional guidance and more comprehensive compliance resources for small businesses on its website (www.fincen.gov/boi) in the coming months. We encourage businesses to regularly visit FinCEN's website to ensure a smooth transition when the reporting requirements take effect.