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In 2022, the Financial Crimes Enforcement Network (FinCEN) issued a rule allowed under the Corporate Transparency Act (2021) that requires beneficial ownership information reporting for certain companies and entities. Beginning in 2024, companies and organizations that are not exempt must report their beneficial owners to FinCEN.
Why was this rule issued?
These new rules are a joint effort between Congress and FinCEN. The goal is to help crack down on financial crimes, fraud, and to make it difficult for individuals to benefit from ill-gotten gains passed through shell companies or other business structures.
Who does this affect?
Many domestic and foreign companies, including closely held LLCs, that have registered to do business in the United States by filing with a Secretary of State office are required to file their beneficial owners with FinCEN.
There are 23 types of entities that are exempt from filing beneficial ownership information. Many of the exempt entities are financial institutions that already have FinCEN reporting requirements as part of the Bank Secrecy Act (BSA).
Information about who does and does not need to file Beneficial Ownership Information can be found on the Beneficial Ownership Information Page at FinCEN.gov and on the Beneficial Ownership Frequently Asked Questions Page
Who will have access to this information?
Beneficial Ownership Information, per rules passed by FinCEN, will be stored in a secure database not available to the public. FinCEN may provide access to the following agencies:
- State, local and Tribal law enforcement (with court authorization)
- Foreign law authorities (with U.S. Federal agency approval)
- Financial institutions and regulators
What needs to be done?
If your investment company falls under one of the businesses required to report beneficial owner information, you have until January 1st of 2025 to report beneficial owner information to FinCEN.
For companies created or registered in 2024, you have 90 days after registration is completed to file beneficial ownership information.
If your company is created or registered after January 1st 2025, you have 30 days to file beneficial ownership information with FinCEN. There is no fee to register
Beneficial Ownership information can be filed with FinCEN at their website Beneficial Ownership Information Reporting | FinCEN.gov
New Direction Trust does not complete beneficial ownership reporting on behalf of any clients or their investment companies nor do we have a FinCEN identifier for client use. Clients will need to establish their own beneficial owner ID number(s) with FinCen on behalf of any closely held LLCs within their accounts.
How can I get more information?
Beneficial Ownership Information Reporting | FinCEN.gov
Beneficial Ownership Information Brochure PDF
https://www.youtube.com/@fincentreasury
Beneficial Ownership FAQs | FinCEN.gov
