New Federal Beneficial Ownership Reporting Requirements
As part of the Corporate Transparency Act, there are new requirements for certain businesses, known as “reporting companies,” to report information about their beneficial owners. Previously, financial institutions such as Flatwater Bank exclusively maintained beneficial ownership records. As of January 1, 2024, FinCEN has implemented a new rule where businesses that meet the definition of "reporting company" are required to report information directly to FinCEN.
Who are reporting companies?
Most corporations, LLCs and other entities “created by the filing of a document with the Secretary of State office.” Certain business types are NOT required to report their beneficial ownership information, including: sole proprietors, non-profits, general partnerships, unincorporated associations, government authorities, municipalities, financial institutions, securities brokers, investment companies, and insurance companies.
Please visit www.FinCEN.gov/BOI to determine your reporting requirements.
When is reporting required?
If an entity was created BEFORE January 1, 2024, the reporting must be completed by December 31, 2024.
If an entity is created ON or AFTER January 1, 2024, the reporting must be completed within 90-days of the company creation.
Entities created on or after January 1, 2025 must report within 90-days of the company creation.
Who are Beneficial Owners?
A beneficial owner is defined as an individual who, directly or indirectly, either (1) exercises substantial control over a reporting company, or (2) owns or controls at least 25 percent of the ownership interests of a reporting company.
- Substantial control is defined by a range of activities that could constitute substantial control of a reporting company, including anyone able to make important decisions on behalf of the entity.
- Ownership is defined by 25% or more of the ownership interests of the company and addresses how a reporting company should handle a situation in which ownership interests are held in trust.
What Information Must Be Reported?
- Reporting Company – full legal name, trade name(s), physical address, EIN for the company
- Beneficial Owner/Company Applicant – full legal name, date of birth, physical address, copy of non-expired government issued ID
How to Report:
Reporting companies will have to report beneficial ownership information electronically through FinCEN's website: Beneficial Ownership Reporting. Reports will be accepted starting on January 1, 2024. For more information on this reporting change, visit Beneficial Ownership Information Reporting.
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