Reminder concerning FinCEN annual reporting requirement for LLCs

Effective January 1, 2024, corporations and LLCs are required to provide certain information to FinCEN, a unit of the US Department of the Treasury. Each business entity must disclose their Beneficial Ownership Information (“BOI”) annually. This new reporting requirement is part of the Corporate Transparency Act (“CTA”), enacted by Congress in 2021. The CTA requires certain categories of businesses to report information about their ownership and controllers to FinCEN.

Per the CTA, a beneficial owner is one who is an individual who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise (i) exercises substantial control over the entity; or (ii) owns or controls not less than 25% of the ownership interests of the entity. Business entities must also provide certain information about the business itself: legal name, trade name, current address of its principal place of business, jurisdiction of formation/registration, and federal Taxpayer Identification Number (“TIN”).

Please note that, per the CTA, failure to disclose BOI may result in a civil penalty of not more than $500 per day until the report is provided. Further, the CTA authorizes criminal penalties of up to 2 years in prison and fines up to $10,000. It is in your best interest to ensure compliance with this new requirement.

The deadline for 2024 for business entities created in 2023 or earlier is January 1, 2025. We recommend that all business entities meet these reporting requirements well in advance of the deadline to ensure compliance.

If your LLC has not yet provided its BOI to FinCEN, or if you are not sure how to register with FinCEN or provide the necessary reports, we can help. Please contact Tesser & Cohen, P.C. (www.tessercohen.com, (201) 343-1100) to discuss how we can help your business meet these new requirements.