In 2021, Congress passed the Corporate Transparency Act, requiring businesses to report the identity of their owners. Its goal was simple: prevent financial crimes by knowing the identity of corporation owners. Today, many small businesses like farms and ranches are required to comply with this requirement.
The below resources are available to help business owners navigate the new regulations.
Background
Under the Corporate Transparency Act, companies with 20 or fewer employees are required to report information about their “beneficial owners,” or the individual(s) who own at least 25% of the entity’s ownership interest, exercise substantial control over the entity, or receive a substantial economic benefit from the assets of the reporting entity. In basic terms, you are a beneficial owner if you own at least 25% of a company, control or make major decisions for a company, or receive substantial earnings from a company.
Who files & how to file
Many cattle raisers may be impacted by this law. If your operation is a LLC, corporation, or other legal entity that files with your secretary of state, you are required to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. Foreign companies registered to do business in any U.S. state are also required to report this information.
Cattle raisers whose operation is a LLC, corporation, or other legal entity that files with the secretary of state are required to report the following information for each beneficial owner with FinCEN:
1. Legal Name
2. Date of Birth
3. Residential or Business Address
4. Unique Identifying Number (i.e. Driver’s License Number, Passport Number)
Beneficial ownership reports can be filed with FinCEN online at www.boiefiling.fincen.gov. For more information about this requirement, visit www.fincen.gov/boi.
Deadlines & Penalties
Any LLC, corporation, or similar legal entity that was registered to do business before Jan. 1, 2024, could have until Jan. 13, 2025, to file an initial report with FinCEN. The deadline has been extended from Jan. 1, 2025 due to federal court rulings. Consult tax and legal advisors to find out which deadlines apply to your business.
Any LLC, corporation, or similar legal entity that was registered to do business on or after Jan. 1, 2024, and before Jan. 1, 2025, will have 90 days after the company’s creation or registration to file an initial report with FinCEN. The reporting timeline will be shortened to 30 days for companies formed in 2025, and further updates to existing reports must be filed within 30 days. Failure to file the required information with FinCEN can result in a $500 per day fine for non-compliance, fines of up to $10,000, and a possible two-year prison sentence for willful non-compliance with the law.
Additional Resources
[FinCEN] Small Entity Compliance Guide
[FinCEN] Frequently Asked Questions
Read the requirement here: https://www.fincen.gov/boi
The above information is not legal or tax advice. Individuals should consult with their attorneys or tax advisors to ensure compliance.
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