Written by: Peter Bronstein, Esq. and accountant at Law Office of Peter Bronstein, CEO of legalstepz.com and radio host at KHTS for Ask Brien.

2024 has officially arrived and in typical fashion, the United States government has implemented a new law affecting anyone who forms a corporation, a limited liability company or a multitude of creating a business using any of the 50 States Secretary of State websites.

Corporation, LLC or other businesses created after January 1, 2024.

If formed after January 1, 2024, you must file a Beneficial Ownership Report with FINCEN.  Willful failure to timely report is a $500 per day penalty and could include criminal penalties.

What must be reported?

A beneficial owner is a shareholder with over 25% interest, or anyone controlling the entity whether they have 25% ownership or not. Thus, an officer who owns 1%. If you have substantial influence over important decisions, that triggers your inclusion. This is very broad, and it will take time for the Courts to determine, so you probably need to include yourself in the report to be safe.

What information do I need to include?

You need a passport, State ID, or driver’s license with your date of birth, name, and street address. A post office or mailbox address will not be acceptable.

Can I get more information?

This is a new law, and even accountants and attorneys are still learning this new requirement. If you want, then [email protected] a practicing attorney can help you.

Why am I now required to file?

Due to money laundering, fake companies and terrorists, the government is requiring you to disclose beneficial ownership.

I formed my corporation or LLC or other State entity prior to January 1, 2024; when do I report?

Beginning January 1, 2025, all corporations, limited liability companies and businesses formed through the Secretary of State will be required to file beneficial ownership. They have a 1-year grace period, but all businesses are affected.

My corporation or LLC was formed in Cayman Islands or other foreign location

If you filed outside the United States but do business in the United States, then you are required to file!

Can I get a Company to do this for me?

If you had a third party like an attorney, accountant, or filing service, they will be the Company Applicant for the Beneficial Ownership Report, and your LLC, corporation, or other business formed with the State Secretary of State website will be the Reporting Company.

If the third party has registered with FINCEN, then they can file for you with an Identifier. You are including personal information such as date of birth, street address with a passport, drivers license or State identification Card, so security is important. The FINCEN system does not share information with the public.

You can legally file yourself just like incorporating yourself. A few companies offer step-by-step instructions.

It is important to comply timely due to potential fines. Make sure you keep a calendar for yearly submissions and changes are reported. Many people who do not file themselves do not realize they need to file any changes yearly. Set up an alert or use a company that alerts you to file.

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