New ownership rule to impact millions of U.S. businesses
November 7, 2023
We wanted to alert you to a new filing requirement that will go into effect on Jan. 1.
The rule will impact more than 30 million businesses, but many owners are unaware of it.
The U.S. Treasury Department’s Financial Crimes Enforcement Network will require that beneficial ownership information be submitted for many small businesses across the country.
The requirement impacts domestic and foreign entities registered with a U.S. state, unless they meet any of 23 exceptions. (The full list of exemptions is included in this document.)
Most notably, businesses are exempt if they have ALL of the following:
• More than 20 employees in the U.S.
• More than $5 million in gross revenue or sales on the prior year’s tax return
• An office in the U.S.
For businesses that are not exempted from the reporting requirement:
• If the business is in existence on Jan. 1, 2024, ownership information must be filed by Jan. 1, 2025. (Note: Existing businesses cannot file this information prior to Jan. 1, 2024.)
• If the business is created after Jan. 1, 2024, it must file within 30 days (though the federal agency has proposed extending that time frame to 90 days).
Learn more about the filing requirements, who they impact and how to file owner information here.
Unfortunately, rules prevent Honkamp from helping our clients file this information, so please consult a lawyer if you need assistance on this matter.