US Beneficial Ownership Registry: A Major Breakthrough in Transparency by FinCEN
January 1st, 2024: The Financial Crimes Enforcement Network (FinCEN) has launched the Beneficial Ownership Information Registry.
In an effort to promote transparency and combat financial crimes, the Corporate Transparency Act of 2021 requires all registered companies in the United States to report their beneficial owners’ details within 90 days of formation. Existing businesses have until January 1, 2025, to comply with this new regulation.
Any companies created before Jan 1, 2024 have until the 12/31/24
What is the Beneficial Ownership Information Registry?
The Beneficial Ownership Information Registry is an online platform that allows businesses to report information about their beneficial owners. The registry is managed by FinCEN, a bureau of the US Department of the Treasury responsible for combating money laundering and other financial crimes.
Why Is This Important?
Before the implementation of the Beneficial Ownership Information Registry, the United States had limited regulations in place regarding the disclosure of beneficial owners of companies. This lack of transparency often made it easier for individuals with malicious intent to hide their identities behind anonymous shell companies. These entities could be used to engage in various illicit activities such as money laundering, fraud, and terrorist financing. The new rules introduced by the Corporate Transparency Act of 2021 represent a significant step forward in addressing these concerns and promoting greater transparency in corporate ownership.
The creation of the Beneficial Ownership Information Registry aims to enhance transparency in corporate ownership and prevent the misuse of anonymous shell companies for illegal activities. By requiring businesses to disclose the names, birthdates, addresses, and identification details of their beneficial owners, the government aims to deter criminals from using these entities for money laundering, fraud, or other illicit purposes.
Compliance Requirements and Deadlines
Newly registered companies must report their beneficial owners’ details within 90 days of formation. Existing businesses have until January 1, 2025, to comply with the reporting requirements.
What Needs to Be Reported?
Businesses are required to provide the following information about their beneficial owners:
- Full legal name
- Date of birth
- Residential or business address
- Identification number (such as a social security number or passport number)
It is important to note that this reporting requirement is a one-time obligation. Updates are only necessary in case of changes to the beneficial ownership structure of a company.
Stay Compliant and Informed!
To ensure compliance with the Beneficial Ownership Information Registry, businesses should familiarize themselves with the reporting requirements and deadlines. It is recommended to visit FinCEN’s website for detailed information and guidelines on how to fulfill these obligations. Greenback’s tax preparers encourage their clients to consult with legal and tax professionals for personalized guidance based on their specific situation.
At Greenback, we are committed to keeping our clients informed about important updates and regulatory changes that may impact their businesses. Stay tuned for more updates from us regarding the US Beneficial Ownership Registry and other relevant topics in the future.
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