The deadline for farmers, ranchers and other agricultural businesses to file documents under Corporate Transparency Act is Jan. 1.

The Corporate Transparency Act of 2021 required businesses to register any “beneficial owner” of a company in an effort to combat money laundering. Many farms are structured as either a c-corporation, s-corporation or limited liability company (LLC), which are now required to be registered if they employ fewer than 20 employees or receive under $5 million in cash receipts. That covers the vast majority of farms.

The act was passed to “combat illegal activities going through shell businesses, so money laundering, organized crime funding, things of that nature,” Samantha Ayoub, associate economist with American Farm Bureau Federation (AFBF), said.

Beneficial Ownership Information must be filed with the U.S. Department of Treasury’s Financial Crimes Enforcement Network.

It’s not just farmers and ranchers that have to worry about the deadline. Many feed and supply stores, crop marketers like grain elevators and the greater rural business community are also likely required to file their Beneficial Owner Information.

“If you’re unsure whether you fall under the authority of the act, check with your accountants and your attorneys and just make sure that you’re in compliance, that you’re filing correctly,” Ayoub said.

Ayoub noted owners can be anyone with a significant role in an organization.

“It qualifies other beneficial ownership information, which covers more than just legal owners. It also includes anyone with managerial control over day-to-day operations,” she said. “It could be family members if they have control over the company and are on the registration documents, or it could be non-family members. It covers a wide variety of owners.”

Filings must include all personal information such as addresses, birthdays and identification numbers for each owner. While this report does not have to be renewed after the initial filing, changes of address, new driver’s licenses or changes of name all require updated filings. Since having control over a business’ operations qualifies as beneficial ownership, a restructuring of job duties, even if the person does not have a legal ownership stake in the company, could also trigger requirements to file updates.

The penalties for not filing by the deadline are steep, including potential prison time.

Businesses that fail to file, or do not update records when needed, could face criminal fines up to $10,000 and additional civil penalties of up to $591 per day. Failure to file could also lead to felony charges and up to two years in prison.

“There have been unsuccessful attempts to extend the filing period for small businesses, but Congress has a long laundry list of other legislation to pass before the end of the year, including a much-needed modernized farm bill and disaster relief,” AFBF economists wrote in a recent Market Intel report. “For now, business owners should anticipate a crackdown on Corporate Transparency Act filings starting Jan. 1 and take steps to ensure they are in compliance.”

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.