How to File a Beneficial Ownership Report: A Guide for Businesses

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At Farmers & Merchants Bank, we’re dedicated to keeping our customers informed about regulatory requirements that impact their businesses. One such requirement is the filing of a Beneficial Ownership report, mandated by the Corporate Transparency Act (CTA). If your business is required to file, understanding the process is essential to ensure compliance and avoid penalties.

What is a Beneficial Ownership Report?
A Beneficial Ownership report provides the federal government with information about individuals who directly or indirectly own or control at least 25% of a company or exercise significant control over its operations. This helps authorities combat financial crimes such as money laundering, fraud, and terrorism financing.

Who Needs to File?
Most U.S. businesses, including corporations, limited liability companies (LLCs), and other similar entities, are required to file. Exceptions include large publicly traded companies and entities already heavily regulated by the government, such as banks and insurance companies.

Key Information to Include
The report must include details about:

  1. The Entity:
  • Name and address
  • State of incorporation or formation
  • Taxpayer Identification Number (TIN)
  1. Beneficial Owners:
  • Full legal name
  • Date of birth
  • Current residential address
  • Government-issued ID details (e.g., passport or driver’s license number)

How to File
Filing your Beneficial Ownership report is a straightforward process when approached systematically:

  1. Determine Your Filing Requirement: Verify whether your business falls under the scope of the CTA and is required to submit a report.
  1. Gather Required Information: Compile all necessary details about your company and its beneficial owners. Ensure the information is accurate and up-to-date.
  1. File Electronically: Submit your report online through the Financial Crimes Enforcement Network (FinCEN) portal. Visit FinCEN.gov for step-by-step instructions and access to the reporting platform.
  1. Stay Compliant: Update your Beneficial Ownership report promptly if ownership or control details change. Updates are typically required within 30 days of a reportable change.

Here is a Five Minute Demo which may be helpful!

Deadlines and Penalties
The CTA requires many businesses to file their initial Beneficial Ownership report by January 1, 2025. For newly created entities, filing is required within 30 days of formation. Failing to file or submitting false information can result in substantial fines and penalties.

How Farmers & Merchants Bank Can Help
At Farmers & Merchants Bank, we’re here to support you in navigating regulatory requirements. If you need guidance on Beneficial Ownership reports or any other financial matter, our team is ready to assist.

Contact us today to learn more about how we can partner with your business to ensure compliance and success.

Stay informed. Stay compliant. Stay ahead with Farmers & Merchants Bank.

NMLS #718145
published on 11/26/2024

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