Business Owners: Take Action Before December 31 to Avoid Significant Penalties

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FinCENFor the past year, we have been advising business owner clients of their obligation to file statements with FINCEN identifying their principal owners. The filing window is rapidly closing. Businesses that have not filed statements of beneficial ownership by December 31, 2024 may be liable for significant penalties – up to $10,000 and imprisonment for up to two years.

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If you have not already filed – or if you are not comfortable completing the filing yourself – the AKM team stands ready to assist. Contact your AKM CPA at your earliest convenience to engage us for this service, ensure compliance and protect yourself from substantial downside risk.

Below is an updated summary of information we have previously provided. As always, please contact your AKM CPA with any questions or concerns.


In 2021 Congress passed The Corporate Transparency Act (“CTA”) to identify bad actors and fight various illegal activities, including laundering money and providing funding for terrorists. CTA specified that various business entities would need to file information with the Financial Crimes Enforcement Network (FinCEN) identifying their primary owners. The final regulations were recently issued and encompass more businesses than previously anticipated.

Who is Affected

CTA filing requirements impact most business entities, including domestic and foreign privately held entities that are incorporated, organized, or registered to do business in a U.S. state.

The following entities are exempt:

  • Companies required to report to the SEC
  • Insurance companies
  • Tax-exempt entities
  • Companies categorized as banks, credit unions, brokerages, venture capital advisors, public utilities, inactive entities, accounting firms, and some others
  • Large operating companies which meet all three of these requirements:
    • 20 or more full time employees in the US
    • $5,000,000 or more in gross receipts or sales in the US (as reported on prior year’s income tax return)
    • Physical office premises in the US

What Needs to Be Filed

BOI: Beneficial Owner Information – this provides personal information of any individual who holds at least 25% of the entity’s assets and/or exercises substantial control over its activities. This will include:

  • Full name as shown on passport
  • Date of birth
  • Home address
  • Passport number and issuing jurisdiction
  • Image of the document

Company Applicant Information
Entities formed on or after January 1, 2024 will also need toprovide responsible party information:

  • The person responsible for submitting the documents that established the entity (US entities) or the person submitting the initial registration document (foreign entities in the US)
  • The person primarily overseeing the submission or formation or registration documents by an outside entity, such as a law or accounting firm

When Filings Are Due

  • Entities formed prior to January 1, 2024: December 31, 2024
  • Entities formed on or after January 1, 2024 and before January 1, 2025:
    90 calendar days after actual or public notice that the entity’s creation is effective
  • Entities formed after January 1, 2025: 30 calendar days from actual or public notice that the entity’s creation is effective

In New York, notice will typically come from the Secretary of State.

Note that this is expected to be an annual filing requirement.

What Else to know – Penalties

There are severe penalties for non-compliance and providing false information. Reporting violations are subject to a fine as high as $10,000 and/or imprisonment for up to two years. Unauthorized disclosure or use violations are subject to a fine of up to $250,000 and/or 5 years in prison, in addition to the penalties for any other crime involved.

Fling Link

Here is the link to file on the FINCen site.

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