How Small Business Owners Can Fight Crime in Just 20 Minutes

UNDERSTANDING NEW FEDERAL BENEFICIAL OWNERSHIP TRANSPARENCY REQUIREMENTS

BY ANDREA GACKI

Anonymous shell companies are a favorite tool of terrorist financiers, drug kingpins, and kleptocrats to launder, move, and park illicit funds in the United States. This dirty money can undermine legitimate business activity and compromise U.S. national security. To address the risks that dirty money presents, the U.S. Department of the Treasury is implementing a bipartisan law called the Corporate Transparency Act, which requires many companies to report information to the Financial Crimes Enforcement Network (FinCEN) about their beneficial owners—in other words, the real people who own or control them.

Delaware is a thriving hub for business. This makes companies created in Delaware vital to anti-money laundering efforts that help protect America’s financial system from illicit activity.

Beneficial ownership information is key to many law enforcement investigations. But opaque ownership structures can make it more difficult for law enforcement to untangle webs of illicit activity. The Corporate Transparency Act calls for the creation of a secure, non-public, centralized database of beneficial ownership information that law enforcement and national security agencies can rely on as they investigate illicit activity. This much-needed transparency will help law enforcement make arrests, prosecute offenders, and seize ill-gotten assets.

Reporting your company’s beneficial ownership information

FinCEN began accepting beneficial ownership information reports on January 1, 2024, and more than a million businesses have already successfully filed. Generally, companies doing business in the United States that filed a document with a secretary of state or similar office as part of their creation or registration process are required to report their beneficial ownership information to FinCEN. Companies are required to report just a few pieces of basic information about themselves and their beneficial owners and, for new businesses, the company applicants involved in company formation.

We have worked diligently to ensure that reporting your company’s beneficial ownership information to FinCEN is seamless. Generally, we’re hearing that filing is easy. For companies with simple ownership structures, filing takes about 10 to 20 minutes. At our dedicated beneficial ownership information webpage, you can file using our e-filing system. There, you will also find small entity compliance guides, multimedia resources, answers to frequently asked questions, ways to reach out to our contact center, and other guidance.

The global and local impacts of corporate transparency

As the world’s largest economy and home to so many thriving businesses, the United States has a unique responsibility to protect the security and integrity of our financial system. Just as our economy’s vulnerabilities have a ripple effect felt around the world, so do our reform efforts, and it’s important that we lead by example as we advance global financial transparency standards to counter illicit finance.

This transparency can also benefit local economies: cracking down on anonymous shell companies also means rooting out fraud, tax evasion, and other deceptive activity that harms businesses.

By complying with the Corporate Transparency Act, business owners are contributing to global and local prosperity and security by making it easier for law enforcement and national security professionals to do their jobs. We all benefit when we do our part to keep dirty money out of our financial system. For more information about beneficial ownership information reporting, please visit www.fincen.gov/boi.

Andrea Gacki is director of the Financial Crimes Enforcement Network (FinCEN) at the U.S. Department of the Treasury.