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FinCEN Issues Initial Beneficial Ownership Information Reporting Guidance

April 21, 2023

On March 24, 2023, the Financial Crimes Enforcement Network (FinCEN) published its first set of guidance materials[1] to aid the public, and in particular the small businesses, in understanding the upcoming beneficial ownership information reporting requirements.

The new requirements, which were issued on September 30, 2022 and will take effect on January 1, 2024, mandate certain corporations, limited liability companies, and other entities created in or registered to do business in the United States to report information about their ultimate beneficial owners to FinCEN.

The set of guidance contains three parts: (i) Answers to Frequently Asked Questions, (ii) One Pagers on Key Filing Dates and Key Questions, and (iii) Informational Videos on YouTube. The contents of the three parts are very similar, they all target to provide explanatory information regarding some basic aspects of the new reporting requirements, including without limitation the following:

  • what companies will be subject to the reporting requirements

  • who is deemed a beneficial owner of a company

  • what information of the company and its beneficial owners shall be reported

  • when do companies need to complete their reporting

  • what kinds of exemption from the reporting requirements are available

  • who will have access to the reported beneficial ownership information

  • what is the cost of submitting the report

The guidance, although not a comprehensive summary of the regulations, is helpful to small business owners in having a basic understanding of the reporting requirements and planning ahead accordingly. FinCEN further states that it will issue additional guidance, including a Small Entity Compliance Guide, at in the coming months. Business owners are encouraged to check the website often in order to have a smooth transition when the requirements officially take effect.

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