Roseville, CA Estate Planning Attorney Warns of Upcoming FinCEN Deadline for Business Owners
New Reporting Requirements for LLCs and Corporations to Combat Fraud
ROSEVILLE, Calif., Oct. 2, 2024 /PRNewswire/ -- Rachel Patton, a prominent estate planning attorney and the principal attorney at Patton Law Group in Roseville, CA, is urging local business owners to prepare for a critical upcoming deadline tied to new regulations from the Financial Crimes Enforcement Network (FinCEN). To combat fraud and money laundering, FinCEN now requires that certain business entities file beneficial ownership information by January 1, 2025. This regulation affects a wide range of businesses, including LLCs, corporations, and other entities, many of which are small, family-owned businesses.
"This new law represents a significant change for millions of small business owners across the U.S. Many of my clients are unaware of these reporting obligations, which makes it essential for them to act promptly," Patton explained.
Understanding the New FinCEN Requirements
Businesses formed before January 1, 2024, must file a FinCEN report by January 1, 2025. For businesses created in 2024, the filing deadline is shortened to 90 days after the company's formation. Starting in 2025, businesses will have just 30 days to submit their reports.
Failure to file can result in penalties, with fines up to $500.00 per day, accumulating to a maximum of $10,000.00. In extreme cases, jail time could be a consequence.
"Business owners should be proactive in addressing these obligations," Patton emphasized. "The penalties are substantial, and ignoring the deadline could lead to serious financial repercussions and even legal trouble."
Who Needs to File and What Information Must Be Reported
The reporting requirements extend to any LLC, corporation, or similar entity where an individual holds at least 25% ownership. Businesses must disclose personal information about their beneficial owners, including names, addresses, dates of birth, and identification numbers (such as a passport or driver's license).
Patton acknowledged privacy concerns. "FinCEN has committed to keeping this information in a private database that won't be publicly accessible," she explained. "This requirement is intended to help prevent fraudulent activities like money laundering, but it will affect even the smallest businesses."
Confusion Among Business Owners and Professionals
One challenge with the FinCEN regulations is confusion over who is responsible for filing. Business owners often receive conflicting advice from their CPAs and attorneys.
"Many of my clients ask if their CPA should handle this, while CPAs often refer them back to their attorneys," Patton noted. "This confusion leaves business owners unsure of what steps to take."
Patton advises business owners to seek legal guidance. "This law affects millions of small business owners, many of whom may not even realize they are required to file," she said.
Affecting Small Business Owners Nationwide
The broad scope of FinCEN's requirements means that even small, family-run businesses are affected. For example, a married couple who owns a rental property through an LLC must comply with the same reporting requirements as larger corporations. Although there are exceptions—such as 501(c)(3) nonprofits—most businesses will need to file the report to avoid penalties.
"The law aims to prevent fraud by making it easier to track business ownership," Patton said. "But because the law is so broad, it's impacting small business owners who might not even be aware of these requirements."
Patton emphasizes the importance of education and awareness as business owners navigate these new regulations. "If you have any doubts, consult with a legal professional who understands FinCEN's rules and how they apply to your business," she added.
About Rachel Patton
Rachel Patton is an experienced estate planning attorney in Roseville, CA. With expertise in business law and asset protection, she helps clients comply with legal requirements while protecting their assets. Her firm, Patton Law Group, provides personalized services tailored to the unique needs of business owners, offering practical and reliable legal guidance.
For more information or to schedule a consultation, visit www.pattonlawgroup.com or contact Patton Law Group at (916) 626-2932.
Media Contact:
Chris Moreno
(239) 244-2424
SOURCE Patton Law Group
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