As part of the Corporate Transparency Act which was passed by Congress in 2021, small businesses have new reporting requirements beginning January 1, 2024. The new rules promulgated by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) require all C corporations, limited liability companies, partnerships and any other entities required to file with the secretary of state to report the beneficial ownership of the entity to FinCEN. Certain exemptions apply for large and publicly traded entities, so this rule essentially impacts small businesses. A beneficial owner is defined as any individual who, directly or indirectly, owns or controls at least 25% of the ownership interests of a reporting company or who exercises substantial control over a reporting company. The reporting company must report on the identity of all beneficial owners upon the formation of the company and on every occasion that such information changes. Companies subject to these requirements that existed prior to January 1, 2024 have until January 1, 2025 to file their initial reports. There is no filing fee; however, failure to comply with these new reporting requirements can result in penalties ranging from $500 to $10,000, and potential imprisonment up to 2 years. We recommend consulting with legal counsel to determine any beneficial ownership reporting requirements.
Why Banks May Reject Your Durable Power of Attorney
A durable power of attorney is a legal document that authorizes a named agent to manage the finances of a principal. It enables the agent to interact with banks and institutions where the principal has financial accounts. While it is important to execute a legally...