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Understanding FinCEN Reporting Requirements for Small Businesses

11/11/2025

The Financial Crimes Enforcement Network (FinCEN) has introduced new reporting requirements under the Corporate Transparency Act (CTA) to enhance corporate transparency and prevent financial crimes like money laundering and fraud. These rules impact many small businesses, requiring them to submit Beneficial Ownership Information (BOI) reports.

Failing to comply with these regulations can result in significant penalties, so it’s essential for business owners to understand their obligations and take action.

What is FinCEN and Why Does It Require Reporting?

FinCEN is a bureau of the U.S. Department of the Treasury that enforces laws to prevent financial crimes. The Corporate Transparency Act (CTA), effective January 1, 2024, requires businesses to disclose ownership information to help authorities track and prevent illicit activities.

The goal is to create a national registry of business owners, ensuring transparency and reducing the misuse of anonymous business entities for illegal activities.

Which Businesses Must File Reports with FinCEN?

Most LLCs, corporations, and similar private entities must file BOI reports unless they fall under specific exemptions. Businesses that are already heavily regulated, such as publicly traded companies, banks, and insurance providers, are generally exempt.

If your business is privately held and registered with a state, there’s a high likelihood that it needs to comply.

What Information Must Be Reported?

Businesses required to file must submit a BOI report that includes details about their beneficial owners, meaning individuals who:

  • Own 25% or more of the company, or
  • Exercise substantial control over business decisions.

The report must include:

  • Full legal name
  • Date of birth
  • Current residential address
  • Government-issued ID number (such as a passport or driver’s license)

For businesses formed after January 1, 2024, information on company applicants (those who filed incorporation documents) is also required.

Filing Deadlines for FinCEN Reports

The timing of the BOI filing depends on when your business was formed:

  • Existing businesses (before Jan. 1, 2024): Must file by Jan. 1, 2025.
  • New businesses (formed in 2024 and beyond): Must file within 90 days of registration.
  • Ownership changes or corrections: Updates must be filed within 30 days of any changes.

What Happens If a Business Fails to Comply?

Non-compliance can lead to serious penalties, including:

  • Fines of up to $500 per day for ongoing violations
  • Criminal charges, including potential legal action for intentional violations

Since FinCEN reporting is not an annual requirement, once a business submits the BOI report, updates are only necessary when ownership details change.

How Small Businesses Can Ensure Compliance

  1. Determine If Filing is Required
    Check your business structure and ownership to confirm whether BOI reporting applies.
  2. Gather Required Information
    Identify all beneficial owners and collect the necessary details before filing.
  3. File with FinCEN Before the Deadline
    Reports must be submitted electronically through FinCEN’s online portal.
  4. Monitor and Update Information as Needed
    Any changes in ownership, leadership, or business structure must be updated within 30 days to remain compliant.
  5. Seek Professional Assistance
    FinCEN reporting can be complex, especially for businesses with multiple owners. Partnering with a professional advisory firm like Perpetual CPA LLP ensures accurate filings and compliance peace of mind.

Final Thoughts: Stay Ahead of FinCEN Reporting Requirements

FinCEN’s new reporting rules are a major shift for small businesses, requiring proactive compliance to avoid penalties. Understanding who needs to file, what information is required, and how to meet deadlines is crucial for business owners.

For professional support with FinCEN reporting, bookkeeping, and compliance advisory, visit www.perpetualcpa.com.

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      b. Some of the questions to consider when coming up with a growth strategy are:
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