FinCEN’s Beneficial Ownership Information refers to the details that certain entities are required to provide to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. This requirement is part of broader measures aimed at preventing financial crimes like money laundering and terrorist financing. Here’s a breakdown of what this information typically includes:
- Definition of a Beneficial Owner: A beneficial owner is generally defined as an individual who directly or indirectly owns or controls a significant percentage (usually 25% or more) of the equity interests of a company. It can also include persons who have significant control over the company, regardless of their ownership stake.
- Reporting Requirements: Entities subject to these requirements, often referred to as “reporting companies,” must provide FinCEN with specific information about their beneficial owners. This includes identifying information like names, addresses, dates of birth, and identification numbers (such as a Social Security Number or passport number).
- Purpose: The aim is to enhance transparency in business operations and financial transactions. By knowing the true owners of companies, it becomes harder for individuals to use corporate structures to hide illicit funds, evade taxes, or engage in other illegal activities.
- Entities Affected: This requirement typically applies to certain types of corporations, limited liability companies (LLCs), and other similar entities created in or registered to do business in the United States.
- Implementation and Compliance: FinCEN provides guidance and frequently asked questions (FAQs) to assist in compliance. Companies are expected to collect and report this information accurately and may face penalties for non-compliance.
- Access to Information: The information collected is used by law enforcement and other authorized agencies for investigations and regulatory purposes. It is not generally available to the public.
The Beneficial Ownership Information requirements are part of broader regulations under the Bank Secrecy Act and other financial regulatory frameworks, aimed at enhancing the integrity of the financial system and combating financial crime.
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This page was last updated on January 13, 2024.
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