Secretary of State Michael Adams issued an alert Thursday to Kentucky’s small business community, about a new reporting requirement from the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) that goes into effect on January 1, 2024.
Disclosure of so-called beneficial ownership information (“BOI”), which requires small business owners and certain individuals to upload their photo IDs to FinCEN, will now be required. Business entities that are formed after January 1, 2024, will have 90 days to report their initial BOI. Business entities already in existence will have until January 1, 2025, to comply with the new requirement.
“Despite my forceful written objections, the federal bureaucracy is placing new burdens on Kentucky’s small business owners,” said Adams. “With all our entrepreneurs have faced the past few years, we should be lifting them up, not making it even harder to start a business and create jobs.”
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There are some exceptions to the new reporting requirement, however. It does not apply to certain business entities such as publicly traded companies and nonprofits. Failure to comply with BOI reporting may result in criminal prosecution, punishable by a maximum penalty of two years in prison and a $10,000 fine.
More information about FinCEN and the new BOI requirement can be found at www.fincen.gov/boi.