Attention FAE Customers:
Please be aware that NASBA credits are awarded based on whether the events are webcast or in-person, as well as on the number of CPE credits.
Please check the event registration page to see if NASBA credits are being awarded for the programs you select.

FinCEN Issues Initial Guidance for Beneficial Ownership Information

S.J. Steinhardt
Published Date:
Mar 29, 2023

iStock-157679087 Treasury Department

The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued reporting requirements for initial beneficial ownership information (BOI).

The new regulations, which will take effect on Jan. 1, 2024, “require many corporations, limited liability companies, and other entities created in or registered to do business in the United States to report information about their beneficial owners—the persons who ultimately own or control the company—to FinCEN,” the guidance states.

“The Corporate Transparency Act, through its beneficial ownership reporting requirements, provides the historic opportunity to unmask shell companies and protect the U.S. financial system from abuse by money launderers, drug traffickers, sanctioned oligarchs, and other criminals,” said Himamauli Das, acting director of FinCEN. “We are committed to making this transparency process as simple as possible, particularly for small businesses who may have never heard of or interacted with FinCEN before.”

The following materials are now available on FinCEN’s beneficial ownership information reporting webpage:

• Answers to Frequently Asked Questions about the reporting requirement.
• One Pagers on Key Filing Dates and Key Questions.
• An Introductory Video and more detailed Informational Video about the reporting requirement.

According to FinCEN's FAQs, a beneficial owner is any individual who directly or indirectly exercises "substantial control" over a reporting company, or who directly or indirectly owns or controls 25 percent or more of the "ownership interests" of a reporting company. Failure to do so can result in civil or criminal penalties. 

According to its Key Filing Dates page, companies created or registered to do business in the United States before Jan. 1, 2024, must file their reports by Jan. 1, 2025. Companies created or registered to do business in the United States on or after Jan. 1, 2024, must file their reports within 30 calendar days of receiving actual or public notice that the creation or registration of the reporting company is effective.

Under the new reporting rules, 32.6 million small businesses will be legally obligated to comply when the regulations take effect. Five million more will be added every following year, while large companies will mostly be exempt, Kevin Matthews, an assistant professor of accounting at George Mason University's School of Business and a CPA, told Accounting Today. He said that most people don't know about these rules.

"There's a huge awareness gap," Roger Harris, president of Padgett Business Services, told Accounting Today. "If you think that you're exempt because you're a small company, you're not. You couldn't file today even if you wanted to, but just make sure it's on your radar for next year." 

Click here to see more of the latest news from the NYSSCPA.