A new FinCEN regulation (Beneficial Ownership Information Reporting) starts on January 1, 2024. FinCEN falls within the Department of the Treasury, and the regulation is set up to prevent money laundering through small businesses. This regulation is also known as the Corporate Transparency Act.
Small businesses (including LLCs, S-Corps and C-Corps, but not sole-proprietors) are required to file a form showing “beneficial ownership”. The form has not yet been released. If your company exceeds the size guidelines in annual sales and employees, you will not need to file. Consult the website listed below for size guidelines.
The good news is that all previously filed companies (registered up to and including December 31, 2023) will have the calendar year 2024 to file the form. We recommend filing the form in January 2024 or, at the same time you file your tax return, so you do not need to remember to file it late in the year.
The bad news is that all new companies (registered on January 1, 2024, and after) must file this form within 90 days of establishing the company. There is a strong effort currently to change this timeline to within 90 days in 2024 and this change may have happened by the time you read this newsletter.
The very bad news is that penalties for not filing on time are very steep. Civil penalties are up to $500 per day for each day of late filing, capping out at $10,000. There are also potential criminal penalties.
The NH SBDC is paying close attention to this new regulation and will keep you informed. You can follow the progress of this regulation on www.fincen.gov.