Get a good idea and stay with it. Dog it, and work at it until it’s done right. - Walt Disney

Filing as a Beneficial Owner: What You Need to Know

UPDATE!

ON Wednesday, December 4, 2024: Texas District Court Strikes Down Beneficial Ownership Reporting Requirements

What does this mean?

I suggest you go read the article and then speak to your accountant, CPA, or attorney. I wondered if a decision would come down when I posted this and I'm cracking up. You can thank me for pushing then along!

The Pre-District Court Decision Post:

Before we dive in, let me be clear: I’m not an attorney, and this post isn’t legal advice. I’m here to share information and point you in the right direction so you can handle this with confidence. When in doubt, always consult a professional (and we’ll talk about who to call for help later). Now, let’s get to it!

What Is a Beneficial Owner?

Definition: Anyone who owns or controls at least 25% of a company, or who has significant influence over its operations.

The government wants to know who these individuals are for transparency reasons—think anti-money laundering laws and preventing fraud.

This filing is required under the Corporate Transparency Act (CTA), which was passed to keep businesses accountable and above-board. The idea is to create a database of beneficial ownership information, and let’s be honest—it’s a bit of extra paperwork, but it’s all about protecting the integrity of our businesses.

Who Has To File?

Not every business is required to file, but the vast majority of smaller businesses and LLCs are included. Here’s a quick rundown of who does need to file:

• LLCs, corporations, and other similar entities formed in the U.S.

• Foreign companies registered to do business in the U.S.

There are exemptions for certain types of organizations—like publicly traded companies, nonprofits, or larger entities that already have significant regulatory oversight. But if you’re running a small business or side hustle under an LLC or corporation, this probably applies to you.

When Does it Have to be Done?

Deadlines are crucial here, and trust me, this is not one you want to miss.

• If your business was created before this January 1, 2024, you have until January 1, 2025 to file.

• If you’re forming a new business after January 1, 2024, you must file within 30 days of registration.

Penny's ProTip: Procrastination isn’t your friend here, so put this on your to-do list ASAP if you've not yet filed.

How to File

The good news? Filing doesn’t have to cost you a dime if you're a do-it-yourself kind of person. The government has created a free filing platform through FinCEN (Financial Crimes Enforcement Network). You can file directly on their official site: www.fincen.gov.

The process itself is straightforward, but you’ll need some information handy, like:

• Full legal name, address, and date of birth for all beneficial owners.

• A government-issued ID number for each person (like a driver’s license or passport).

• Basic information about your company, such as its legal name, formation date, and address.

Once you’ve gathered everything, it’s a matter of following the prompts and submitting the form.

Who Can Help You?

I know, I know—this kind of stuff can feel overwhelming. I was totally overwhelmed and it took me three times as long as it probably should have.

Let's face it, out time is precious, and the last thing we want to do is spend hours deciphering government-speak.

Here’s the good news: there are people you can turn to for support. I wish I'd had this list when I filed mine!

• Attorneys: A business attorney is your go-to for anything legal. They’ll know the ins and outs of the CTA and can ensure you’re filing correctly.

• Accountants and bookkeepers: Your trusty financial professional is another solid resource. While this isn’t exactly a tax issue, many accountants and bookkeepers are familiar with compliance filings and can guide you.

• Business coaches or consultants: If you work with a coach (like me!) or a business consultant, they might offer support or direct you to someone who specializes in compliance.

• Local Small Business Development Centers (SBDCs): These organizations often provide free or low-cost assistance to small business owners.

Penny's ProTip: if you want or need help, shoot me a message and I'll help you find someone. Email me at penny@pennywallace.com

Why This Matters

Yes, this is another form to file, and I get it—it’s one more "back-office/admin" thing that we HAVE to do. But here’s the deal:

Skipping this requirement isn’t an option.

Failing to file can result in penalties, including steep fines. And let’s be real—none of us have time for that kind of stress...or need to spending that kind of money on something that could easily have bene avoided.

But beyond avoiding penalties, think of it this way: filing as a beneficial owner shows that you’re a legitimate, transparent business. It builds trust with your clients, your partners, and even yourself as the CEO of your venture.

Do Filings Have to be Updated?

Once you've filed your initial Beneficial Ownership Information (BOI) report under the Corporate Transparency Act, you'll need to stay on top of updates. Here's what you need to know moving forward:

Deadline for Updates: If there’s a change in your business or beneficial ownership information, you must file an updated report within 30 days of the change.

No Annual Filing Required: Unlike taxes, there’s no yearly filing requirement if nothing changes. But if changes do occur, the 30-day clock starts ticking.

What Counts as a Change?

You’ll need to update your filing if:

• Ownership structure changes (e.g., someone buys or sells shares).

• A beneficial owner’s personal details (like their address or legal name) change.

• The company itself undergoes changes (e.g., a name change or reorganization).

Staying compliant is straightforward as long as you keep your information current. Set a reminder to review your business records periodically, just to ensure everything is up-to-date!

In Closing

Ladies, running a business is no joke, and I know firsthand how much is already on your plate. Filing as a beneficial owner is just one more piece of the puzzle—but it’s one that’s worth getting right and doing NOW if you've not done it yet.

Set aside some time, gather your info, and head over to www.fincen.gov to get it done. If you need help, don’t hesitate to call your attorney, accountant, or even a friend in the business world who’s been through it before, or shoot me an email and I'll help you find someone. You’ve got this!

And remember, this is all part of building a business that’s not just successful but solid, transparent, and ready to scale. One step at a time, you’re creating something amazing.

Now go do this so you can move on to the money making activities!

Helpful Links

FinCEN Beneficial Ownership Filing Portal: www.fincen.gov
Start here for filing directly with the government. It’s free and has resources to walk you through the process.

Small Business Administration (SBA): www.sba.gov
The SBA provides guidance and resources for small business compliance, including links to local assistance centers.

Local Small Business Development Centers (SBDCs): Find Your Local SBDC
SBDCs offer free or low-cost assistance to small business owners, including help with filings and compliance.