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SMALL BUSINESS ALERT: January 1, 2024 - Beneficial Ownership Information Reporting

Client Alert
October 13, 2023

Beginning on January 1, 2024, many small businesses across the United States will have to report personal information about their owners, beneficial owners, and others who own or exercise control over the company. The information will have to be reported to, and maintained by, the Financial Crimes Enforcement Network (“FinCEN”) as part of the Beneficial Ownership Information Rule. FinCEN is a bureau of the U.S. Department of the Treasury.

The Rule was adopted as part of the Corporate Transparency Act passed by Congress in 2021. The required reporting is designed to make it more difficult for bad actors to shelter or hide finances through shell companies or complicated ownership structures. All domestic and foreign corporations, LLC’s, or other entities created by the filing of a document with the Secretary of State or similar office in the United States must file, unless it qualifies for one of the several enumerated exemptions identified in the Rule.  A business required to file (a “reporting company”) will need to include certain specified personal information concerning:

  • The business itself.
  • Any owners holding 25% or more of the stock, voting rights, or ownership interests in the company.
  • Any other individuals (such as senior officers or other important decision makers), whether or not they are owners, who exercise substantial control over the company’s finances, structure, or business operations.
  • Individuals who filed, or directed the filing, of the organizing documents that created or registered the company (for entities formed after 1/1/2024).

The personal information for any individual required to be disclosed includes the individuals full name and address, date of birth, and other identifying information such as a passport number, driver’s license number, etc.

Because the intent of the legislation is to gain information from small businesses, those businesses existing on January 1, 2024 will have one (1) year to comply. Any businesses formed after January 1, 2024 will need to disclose and file the beneficial owner information within thirty (30) days of the entities formation. In addition, any changes in the information disclosed must be updated within thirty (30) days.

A failure to report complete or updated information to FinCEN, or an attempt to provide false or fraudulent information, may result in civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two (2) years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required report may be held accountable for that failure.

Business owners should act now to identify whether their company must report and if so, which individuals within the business entity are required to disclose the personal information designated under the Rule. For more information about The Rule or how to comply, please contact BMD Member Blake Gerney at brgerney@bmdllc.com. 

small businessBlake R. GerneyBeneficial Ownership Information Reportingbusiness and corporate law
Client Alert

Telehealth Flexibility Updates: HIPAA, DEA, and CMS

May 12, 2023The Covid-19 Public Health Emergency (PHE) officially ended on May 11, 2023. But what does that mean for telehealth, a field that expanded exponentially during the PHE? Fortunately, many of the flexibilities will remain intact, at least temporarily. This client alert presents a brief overview of the timelines that providers need to follow, but for a more comprehensive review of telehealth flexibilities and when they will endClient Alert, Multimedia

WEBINAR SERIES RECAP | Ending the Public Health Emergency + Post-Pandemic Check-Up

May 10, 2023Some may take the position that the rest of the country already returned to a new “normal” following the COVID-19 pandemic.  But healthcare providers continue to implement COVID protocols and navigate the ever-changing healthcare regulations at both the federal and state levels.  It is important for healthcare providers to take time for a “Healthcare Check-Up” with the start of 2023 and the ending of the Public Health Emergency (“PHE”).Client Alert

Sharp Rise in False Claims Act Cases - Navigating the FCA Waters

May 5, 2023Recently, on April 18, 2023, the United States Supreme Court heard arguments regarding the FCA’s scienter, or mental state, requirement. To prove violation of the FCA, the statute requires that a defendant “knowingly” file false claims for payment. The term “knowingly” is defined within the statute to mean a person that acts with actual knowledge, deliberate ignorance, or reckless disregard. Circuit courts are split on how to interpret and apply the knowledge element of the FCA, and based on the Supreme Court’s decision, there will be a large impact on healthcare defendants and their businesses as well as anyone who contracts with, or receives money from, a federal program. A broader interpretation of the FCA would unnecessarily target and stifle healthcare, and other businesses, for simple errors in daily operations. This goes against the intended application of the FCA, which was to prevent fraudulent activity.Client Alert

Areas of Opportunity in Columbus: Highlights from the Columbus Opportunity Summit

May 5, 2023On April 27, 2023 Columbus Business First held its annual Columbus Opportunity Summit, bringing together business and economic development leaders to provide an update on how Central Ohio is preparing for expected growth in the coming years, an issue heightened by the arrival of Intel at its 1,000 acre site in Licking County, just outside of Columbus. The site will be home to two new chip factories with room to grow to a total of eight factories and is a $20 Billion investment.Client Alert

BREAKING: Biden Administration Has Officially Ended the Two Remaining COVID Vaccine Mandates

May 2, 2023As of May 1, 2023, the Biden Administration has officially ended the two remaining COVID vaccine mandates: (1) the Federal Contractor Mandate, and (2) the CMS Healthcare Provider Vaccine Mandate.
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