Businesses reminded to file ownership info

Sundance State Bank is reminding business owners of new federal requirements to report the names of the people who own or control your company.

Failing to do so could result in civil or criminal penalties, including imprisonment.

The new Beneficial Ownership Information (BOI) regulations require that most companies report the names of all beneficial owners.

This must be done before January 1, 2025 if your company was created before the beginning of this year. If you have established the company since January, you have 90 days to complete the reporting requirements.

After January 1, 2025, if you establish a new company, you will only have 30 days to report the names of all beneficial owners; if the information changes, you will have 30 days to file the updated information.

BOI regulations became effective at the beginning of the year and require reporting to the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury, through fincen.gov/boi. Unless you need to update your information, reporting is only needed once.

Almost every type of entity must report aside from 23 exemptions, which include publicly traded companies, nonprofits and certain large operating companies, according to the U.S. Department of the Treasury.

The exemptions include, for example, companies that meet the correct requirements to qualify as a bank or credit union, governmental authority, insurance company, accounting firm, tax-exempt entity, public utility or broker.

Inactive entities are also generally exempt, but Sundance State Bank recommends consulting legal counsel to determine whether your closed company still needs to report.

Sundance State Bank recommends consulting with your legal counsel to determine whether you meet one of the exemptions.

If you are not exempt, you will need to identify all beneficial owners. This includes any individual who either directly or indirectly exercises substantial control over the company or owns or controls at least 25% of the ownership interests.

People with substantial control may include a senior officer, such as a president, general counsel or member of the C-suite roles, or any other officer who performs a similar function. It can also include a person who has the ability to appoint or remove a senior officer or majority of the board of directors.

It can also include important decision-makers, which refers to people who can make or influence business, financial or structural decisions.

Ownership interests, meanwhile, include equity, stock, voting rights, capital or profit interest, convertible instruments, options or other nonbinding privileges to buy or sell any of these items.

Direct ways to exercise control may include board representation, ownership of a majority of voting power or rights associated with financing or interest. Indirect ways could include controlling an intermediary entity that exercises substantial control or through arrangements or business relationships.

Guidance to identify whether your company needs to report and the individuals who should be identified can be accessed through the Small Business Compliance Guide at fincen.gov.

Failing to report beneficial ownership or willfully providing false information could lead to civil or criminal penalties. Civil penalties could be up to $500 per day that the violation continues; criminal penalties could include up to two years of imprisonment and/or a fine of up to $10,000.

Senior officers can be held accountable for failures to report.