What Businesses Need to Know About the New FinCEN Reporting Requirement

The United States Congress recently passed the Corporate Transparency Act which requires many businesses to disclose their “beneficial ownership” information to the Department of Treasury’s Financial Crimes Enforcement Network. Generally speaking, non-exempt businesses formed in 2024 have ninety (90) days to file the disclosure whereas older business entities have until the end of 2024. The disclosure may be filed online.

What is the Purpose of the Corporate Transparency Act? Congress passed the Corporate Transparency Act in 2021 on a bipartisan basis. This law creates a new beneficial ownership information reporting requirement. The purpose of the disclosure is to make it harder for criminals to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.

Penalties for Noncompliance. Penalties for noncompliance with the FinCEN reporting requirements may include hefty fines and even (theoretically) jail time. Therefore, we recommend that all businesses take this new legislation seriously.

Caution: Beware of Fraud. According to FinCEN, fraudsters are using the Corporate Transparency Act as a means of eliciting personal information. FinCEN does not send unsolicited requests for personal information. Therefore, we do not recommend responding to any solicitations (especially via e-mail) for FinCEN information without first consulting with your accountant and/or attorney.

How Do I Keep My Personal Information Safe? Many professionals, such as attorneys and accountants, are using encrypted e-mails and related means to share confidential information (such as social security numbers) with clients. The disclosure to FinCEN is completed online so accessing a secure network to submit the information is recommended.

How Can I Learn More About FinCEN? FinCEN’s Frequently Asked Questions website may be accessed online by clicking here.

Does FinCEN Apply to You? Certain organizations, such as large publicly traded corporations, are exempt from the FinCEN reporting requirements. If you need advice on whether your entity is exempt or if you have other legal needs, please contact us at (914) 338-8050 or send an e-mail to keith@betenskylaw.com. We look forward to hearing from you.

Betensky Law PLLC
118 N. Bedford Road, Suite 302
Mount Kisco, New York 10549
(914) 338-8050

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