If you're a small business owner, you might be subject to a new regulation called the FinCEN Beneficial Ownership Registry rule, which requires you to report information about who really owns your company.
In 2021, the Corporate Transparency Act (CTA) was passed by Congress. The CTA aims to ensure that certain types of companies in the United States provide information about their owners to FinCEN, a part of the U.S. Department of Treasury. That information helps prevent criminals, terrorists, and others from hiding illegal money in the U.S. FinCEN established the Beneficial Ownership Registry rule in response to the CTA.
Here's what you need to know:
Who Needs to Report
- If you're a domestic company (like a corporation or limited liability company) or a foreign company registered to do business in the U.S., you'll likely need to report your ownership information.
- Some companies are exempt from this rule, mainly if they're already subject to other regulations that require them to disclose their ownership information. However, if you're a private company and haven't reported ownership information before, you're likely to fall under this rule.
When to Report
The rule goes into effect on January 1, 2024. If your company already exists or is registered before that date, you must file your initial report with FinCEN by January 1, 2025. If your company is created or registered after January 1, 2024, you have 30 days from the date your company is formed to file your initial report. If there are any changes in your ownership information, you must update FinCEN within 30 days.
What Needs to be Reported
You must provide your company’s legal name, any trade names, its address, the jurisdiction where it was formed or registered and its Taxpayer Identification Number. You must also report details about all beneficial owners. A beneficial owner is any individual who owns 25% or more of the company or has significant control over it (such as officers and board members). You’ll need to provide their names, dates of birth, addresses, identification numbers and images of their identification documents.
Following all these rules may seem daunting. That's where Parallel Markets can help. Parallel specializes in helping businesses with these types of compliance requirements. Here’s how:
- Easy onboarding process: Parallel Markets has advanced software that simplifies the task of collecting and verifying ownership material. Parallel can make sure all your information is accurate and reduce the risk of non-compliance.
- Compliance with FinCEN registry requirements: Parallel Markets has a platform to collect, store and organize all your information safely and securely. When it’s time to submit the required information to FinCEN, you’ll have everything you need ready to go. This makes the whole process effortless and secure.
- Expert guidance and support: Parallel Markets has a team of experts ready to assist you at every step, help you understand the new requirements and ensure you successfully submit your information to FinCEN.
- Scalable solutions: Whether you're a small startup or a big company, Parallel Markets can adapt to your needs. The platform grows with your business, so you'll always stay compliant with changing regulations.
- A trusted reputation: Financial institutions trust Parallel Markets with their compliance needs. Parallel’s commitment to excellence and first-class security measures makes us a reliable partner to streamline your compliance processes.
Preparing for the FinCEN rule doesn't have to be overwhelming; Parallel is here to make it easy.
Disclaimer The information contained in this article is provided for informational purposes only and should not be construed as legal advice on any subject matter. You should not act or refrain from acting on the basis of any content included in this article without seeking legal or other professional advice.