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Owners of small trucking companies may find themselves among the many limited liability company (LLC) owners across the U.S. who could face significant fines and potential prison sentences if they do not comply with a new U.S. Treasury Department regulation. This law, which came into effect on January 1, aims to prevent money laundering, tax evasion, and other financial crimes.
The newly mandated documentation, known as beneficial ownership information reports, is now required for LLCs by the Financial Crimes Enforcement Network (FinCEN). This bureau, part of the Treasury Department, is dedicated to protecting the nation’s financial system from illegal practices while collecting and analyzing financial information for regulatory purposes.
According to the U.S. Small Business Administration, there are approximately 33 million small businesses in the country, many of which are LLCs and include trucking operators.
Under the Corporate Transparency Act, which was enacted in 2021, LLC owners conducting business in the U.S. must disclose information about the individuals who ultimately own or control the company. This includes reporting on beneficial owners (those who own or control at least 25% of the business) and company applicants (the individuals who formally register the LLC).
Is My Company Considered a ‘Reporting Company’?
(Financial Crimes Enforcement Network)
Failure to submit the required report, neglecting to keep the information updated, or providing false data may result in severe civil or criminal penalties. Violators could face fines of up to $500 for each day the violation persists, as well as criminal sentences of up to two years and/or a $10,000 fine.
There are specific deadlines based on when LLCs were established:
- Existing LLCs formed prior to January 1, 2024, must submit their reports by January 1, 2025.
- New LLCs established or registered in 2024 have 90 days from the date they are publicly notified of their registration or formation to file the report.
Are Reporting Requirements Applicable to Company Applicants?
(Financial Crimes Enforcement Network)
FinCEN emphasizes that the reporting process is “simple, secure, and free of charge.” It clarified that beneficial ownership information reports do not need to be submitted annually, only on an as-needed basis for updates or corrections.
For each beneficial owner, LLCs must provide four key pieces of information:
- Name
- Date of birth
- Residential address
- Identifying number and issuer from a valid form of identification (such as an unexpired U.S. driver’s license, U.S. passport, or a state, local, or tribal ID). If these documents are unavailable, a foreign passport can be used, but an image must also be submitted.
Additionally, details about the LLC itself, including its name(s) and address, must be included.
To assist LLC owners with understanding and fulfilling the beneficial ownership information report requirements, FinCEN has created online resources including brochures and instructional videos available at fincen.gov/boi. They have also published a 57-page “Small Entity Compliance Guide” (fincen.gov/boi/small-entity-compliance-guide).
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