A NEW REQUIREMENT FOR LLC’S, AND MOST SMALL BUSINESSES
A NEW REQUIREMENT FOR LLC’S, AND MOST SMALL BUSINESSES
Starting in 2024, corporations, companies, partnerships, and other entities that file formation papers with the Secretary of State or Office of Licensing and Regulatory Affairs (LARA) must file a report with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) providing specified information regarding the entity’s “beneficial owners.”
Entities in existence prior to January 1, 2024, must file these reports by January 1, 2025. Entities formed in 2024 must file the report within 90 days of the entity’s formation. Most Kallas Restaurant Accounting clients will be required to file the Form.
FINES OF UP TO $591 PER DAY
Unfortunately, this will impose burdensome reporting requirements on most businesses, and the willful failure to report information and timely update any changed information can result in significant fines of up to $591 per day until the violation is remedied, or if criminal charges are brought, fines of up to $10,000 and/or two years imprisonment. These penalties can be imposed against the beneficial owner, the entity, and/or the person completing the report.
A BENEFICIAL OWNER DOES NOT HAVE TO BE AN OWNER
A beneficial owner is defined as an individual who exercises substantial control over the entity (regardless of ownership) or owns and controls at least 25% of the entity. The types of information that must be provided (and kept current) for these beneficial owners include the owner’s legal name, residential address, date of birth, and unique identifier number from a nonexpired passport, driver’s license, or state identification card. The entity will also have to provide an image of any of these forms of documentation to FinCEN for all beneficial owners.
Should any of the reported information change or a beneficial ownership interest be sold or transferred, the entity must report this information within 30 days of the change or face the potential of having the penalties described above imposed. So, this may not just be a one-time filing.
Kallas Restaurant Accounting has partnered with The Foley Law Group, PLLC to assist our clients with filing and compliance. If you wish to engage us to help with this new requirement, please contact either Valerie Christy or Dawn Jankowski, and we will prepare a separate written engagement with you that will define the scope of our assistance.
For more information, visit www.fincen.gov/boi or call Kallas.
Kallas will be sending you more information about how you should comply over the next few months.
