Short Answer: Many LLCs and for-profit corporations may need to file with FinCEN. Formed before 2024? You have until the end of the year. Brand new company? You have 90 days. Review the small entity compliance guide or reach out to me if you need help complying. — Rahul

What is the Corporate Transparency Act?

This law was enacted in 2021, and it’s intended to combat money laundering. Congress was worried about complex layers of business entities that obscure the real owners. Congress literally mentions “Russian nesting ‘Matryoshka’ dolls” in the first page of the law. So starting now, the law requires all corporations and LLCs (with exceptions) to disclose their “beneficial owners” to the Treasury Department.

My business is exempt from complying, right? RIGHT?!

There are exceptions, but they are generally for businesses that are large, and/or where the government already knows the information that it wants. Think of public companies or banks or nonprofits or insurance companies or public accounting firms. There is also an exception for “large operating companies” that have more than 20 employees and reported more than $5M in US gross sales to the IRS. For most small businesses, including corporations and LLCs, you should assume you are NOT EXEMPT. 😔🤷🏽😡

Huh. So how do I comply and will the process be miserable?

Sadly, the government thinks the estimated average paperwork burden is “90 to 650 minutes,” and it took me around 45 minutes when I filed. I wish I had better news for you. You’ll need to report your beneficial ownership information (BOI) to the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN). The process launched on January 1st, 2024. For a brand new complex process, FinCEN is doing its best to provide clear instructions and reasonable timelines.

If the business was formed prior to 2024, what information must I provide to FinCEN?

Business name, trade name, country/state of formation, address
Tax ID (EIN/SSN/ITIN)
Beneficial owner information (name, address, upload an ID document image):
- all people who directly or indirectly exert “substantial control” over the business (senior officers, decision-makers, etc.)
- all people who directly or indirectly control 25% or more of the ownership interests of the business

What else must newer (2024) companies provide?

A newer company is required to report its “company applicants,” meaning the one or two people who serve as the “direct filer” and who “directs or controls the filing action.” Think of the people who actually dealt with the filing documents that were submitted to create the entity at the Virginia SCC or similar office. Each of them will have to provide their name, address and upload an ID document image.

And what are the deadlines I should meet?

Formed before 2024? You have until January 1, 2025 to comply.
Formed in 2024? You have 90 days after formation to comply.
Formed in 2025 or later? You have 30 days after formation to comply.

Can I make this filing myself?

Absolutely. FinCEN provides lots of guidance and information on how to file the Beneficial Ownership Information Report (BOIR) and it’s absolutely doable. I recommend you get your info/documents together and then select File Online BOIR. That said, there are exceptions, complications and details along the way, so feel free to reach out if you need help, and we’ll figure it out together. 💪🏽