Economic Development Matters

Economic Development Matters:
Bradley Penka, Rush County Economic Development Director

Have you Heard? There is a new federal rule that went into effect on January 1, 2024 requiring some small business owners to file a report by December 31, 2024 regarding ownership information. What is it?

The Corporate Transparency Act Beneficial Ownership Information Reporting, or BOI for short, requires some businesses to report information about company ownership to the U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN). According to FinCEN, the new rule is designed to “curb illicit finance activities potentially related to crimes such as money laundering, drug trafficking, corruption, and terrorism.”

Is your business required to report Beneficial Ownership Information? According to the United States Small Business Administration, “If your business is a corporation, LLC, or has filed a legal entity with the Secretary of State’s Office or under the law of an Indian Tribe, then the answer may be yes.”

“If your business formation date is on or after January 1, 2024, then you have 90 days to file your report. If your business formation date is before January 1, 2024, then you have until January 1, 2025, to file your report. Changes to reporting company information or beneficial owners must be filed within 30 days after a change occurs.” Penalties may apply for failure to comply with this new rule. There is no fee for filing. Some businesses are exempt from these filing requirements including not-for-profit entities registered under IRS 501c.

I am advising business owners to be careful as there have been companies contacting small business owners and offering to file the forms for exorbitant fees. Be aware, these solicitations are likely a scam! Some of these dishonest companies are using this as an opportunity to capture your driver’s license, banking accounts, and other personal information. Never release any of this information to anyone until you have verified they are reputable. The IRS or FinCEN will never initiate contact by telephone, text, or email.

Many single-owner or small business owners can file the report themselves. If you need help, contact your accountant, or a reputable accounting firm. There are accounting firms here in our area that can help. Again, there is no filing fee from the federal government, but firms may charge their standard fees for assisting you in completing your filing.  

If you have questions, there are places to get the information you need. To learn more about BOI or determine if your business is required to file, visit: https://www.fincen.gov/boi. You may also contact the Kansas Small Business Development Advisor at ksbdc@wichita.edu or (316) 978-3193.

We are providing this information as a public service to business owners in our county. Rush County Economic Development cannot give tax advice or complete reports, but if you need assistance finding someone who can, feel free to contact my office at 785-222-2808.