New FinCEN Rule for Small Business Owners
Congress passed the Corporate Transparency Act in 2021. It is enforced by “FinCEN” – Financial Crimes Enforcement Network. The act mandates small businesses, including LLCs and corporations, to report identifying information on their “beneficial owners”. Corporations, LLCs, and companies that filed a document with the secretary of state are all required to report Beneficial Ownership Information. The deadline for pre-existing companies to file the initial report is January 1, 2025. Newer companies formed in 2024 file within 90 days of their formation. 23 company types are exempt from BOI reporting and you can find that full list on FinCEN’s website.
Who is a beneficial owner?
FinCEN defines a beneficial owner as “an individual who either directly or indirectly: (1) exercises substantial control over the reporting company, or (2) owns or controls at least 25% of the reporting company’s ownership interests”. Direct and indirect beneficial owners are covered. Companies formed post-January 1, 2024, include “company applicants” in their BOI reporting.
Action Steps:
- Small business owners should initiate the process of gathering information and filing to comply with the CTA’s BOI reporting requirements. You can file the BOI report through FinCEN’s website. Timely action is crucial to avoid penalties and ensure compliance with the new law.
- Have more questions? Read these FAQs on FinCEN’s website.
Casey Smith
President, Wiser Wealth Management
Listen to Our Podcast:
Recent posts
Share This Story, Choose Your Platform!
Wiser Wealth Management, Inc (“Wiser Wealth”) is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). As a registered investment adviser, Wiser Wealth and its employees are subject to various rules, filings, and requirements. You can visit the SEC’s website here to obtain further information on our firm or investment adviser’s registration.
Wiser Wealth’s website provides general information regarding our business along with access to additional investment related information, various financial calculators, and external / third party links. Material presented on this website is believed to be from reliable sources and is meant for informational purposes only. Wiser Wealth does not endorse or accept responsibility for the content of any third-party website and is not affiliated with any third-party website or social media page. Wiser Wealth does not expressly or implicitly adopt or endorse any of the expressions, opinions or content posted by third party websites or on social media pages. While Wiser Wealth uses reasonable efforts to obtain information from sources it believes to be reliable, we make no representation that the information or opinions contained in our publications are accurate, reliable, or complete.
To the extent that you utilize any financial calculators or links in our website, you acknowledge and understand that the information provided to you should not be construed as personal investment advice from Wiser Wealth or any of its investment professionals. Advice provided by Wiser Wealth is given only within the context of our contractual agreement with the client. Wiser Wealth does not offer legal, accounting or tax advice. Consult your own attorney, accountant, and other professionals for these services.
