FinCEN said it expects the rule to extend beyond LLCs to limited liability partnerships, business trusts and other entities.

The rule will go into effect on Jan. 1, 2024 and any nonexempt company formed after that will have 30 days to file their report with FinCEN. Companies formed before Jan. 1, 2024, will have a year to file their initial reports.

“For too long, it has been far too easy for criminals, Russian oligarchs, and other bad actors to fund their illicit activity by hiding and moving money through anonymous shell companies and other corporate structures right here in the United States,” said Acting FinCEN Director Himamauli Das. “This final rule is a significant step forward in our efforts to support national security, intelligence, and law enforcement agencies in their work to curb illicit activities. The final rule will also play an important role in protecting American taxpayers and businesses who play by the rules, but are repeatedly hurt by criminals that use companies for illegal reasons.”

FinCEN estimates it would cost about $85 for simple businesses to comply with the new rule.

But the NSBA sees the creation of a national registry that would require small-business owners to submit detailed personal information when banks are already required by law to collect ownership information. The organization said it was an attempt to shift compliance costs to small-business owners.

“The CTA is simply passing the buck from big banks—which have legions of staff to absorb this kind of reporting requirement—to small businesses like mine,” stated NSBA Chair Mike Stanek. “A simple mistake has the potential to land a small-business owner in jail for as long as two years.” Source of the article Bizjournals.com.

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