By Shelby Shank
Field Editor

In an effort to combat money laundering, corrupt financial transactions and financial terrorism, the U.S. federal government is implementing the Corporate Transparency Act.

The act requires businesses to file reports on their ownership with the Financial Crimes Enforcement Network, a Treasury Department agency known as FinCEN. The online portal for filing reports opened Jan. 1.

FinCEN will require businesses to file a Beneficial Ownership Information Report (BOIR) online in order to develop and maintain the database. The information in this database will be freely shared by request with any domestic law enforcement agency and most foreign law enforcement agencies whose country the United States has a treaty with. Previously, this information would have been the subject of a warrant or subpoena served on a financial institution.

The new federal reporting requirement will impact a number of farmers, ranchers and agricultural businesses who are organized as a business entity such as an LLC, corporation or limited partnership.

Farms and ranches operating as an LLC, including those with a single member, have to file a report.

Entities registered before Jan. 1, 2024 have one year to file their first BOIR.

Those created and registered in 2024 must file their BOIR within 90 days of receiving notice from the Secretary of State.

Entities created after Jan. 1, 2025 will have 30 days to file reports.

Businesses have until 2025 to file and will subsequently have 30 days to report any changes in ownership or control. This could include changes in business location, owner address, expiration of applicant’s driver’s license, etc.

There are three categories of information that must be provided—entity information, beneficial owner information and company applicant information.

General partnerships and sole proprietorships are not currently required to report BOI because no document is required to be filed with the state to form these entities.

The online portal created by FinCEN for businesses to file their BOIR can be found here.

Additional information
View the FinCEN FAQs about the Beneficial Ownership Information Reporting rule.

View the FinCEN Small Entity Compliance Guide.

Failure to comply
The Corporate Transparency Act included penalties for both entities and individuals for willful violations of the reporting requirements.

Penalties may be imposed for willfully filing false information and for willfully failing to report. Penalties may include civil fines of up to $500/day each day the violation continues and criminal penalties of up to $10,000 and possible imprisonment for up to two years.