Moving Soon? Better Notify FinCEN!

Starting January 1, 2024, small corporations, LLCs, and similar entities are required to report beneficial ownership information to the Treasury’s Financial Crime Enforcement Network (FinCEN). The penalty for failure to file is up to two years in prison and $10,000.

A beneficial owner is any individual who directly or indirectly exercises substantial control over the company or who owns or controls 25 percent or more of the company. Substantial control is broadly defined to include senior officers, those who have the ability to appoint or remove senior officers or a majority of the board of directors, those who have substantial influence over important decisions, and (the catch all) those who have any other form of substantial control over the company.

For each of the reporting company’s beneficial owners, the reporting company must provide the individual’s (1) legal name, (2) birthdate, (3) current address, and (4) an identifying number from a non-expired driver’s license, passport, or other approved document for each individual, and an image of the document that the number is from.

It doesn’t end there. If there is any change with respect to the required information previously submitted, the individual must file an updated report within 30 days of the change. This includes a change of address or a change of address on the identifying document. If there is an address on identifying document and that address is not the current address, that could be a problem. If the beneficial owner’s current address changes, the beneficial owner has 30 days to update FinCEN. If FinCEN is not updated, the company and beneficial owner could be subject to criminal and civil penalties.

Beneficial owners include more than company owners. If you are a beneficial owner who has filed a report, be sure to comply with FinCEN when you move, change your address, or if your identifying document expires.