October 1, 2024

A question for a long-time NPA Board of Directors member prompted us to continue our search for ways to help members understand their responsibilities under the Financial Crimes Enforcement Network’s (“FinCEN”) regulation implementing the Corporate Transparency Act of 2022. The answer to the Director’s question appears below.

Question: Are pawnbrokers required to report information on the beneficial owners of their businesses or did any court issue an injunction against enforcement of FinCEN’s regulation?

Answer: Although one federal court issued an injunction against enforcement, that court’s decision is so narrow that unless you or your company were plaintiffs in that action, the injunction is not applicable to your business. This means that every other business required to report to FinCEN must report or face serious potential penalties for failing to report.

The final deadline for reporting if your business was open prior to January 1, 2024 is December 31, 2024.

Reports are due for businesses that were closed and sold in 2024 if the business was open prior to January 1, 2024.

FinCEN’s Beneficial Ownership Reporting Toolkit is available to help every reporting business in preparing their filings: FinCEN intends to enforce the beneficial ownership reporting regulation for all corporations, limited liability companies (LLCs) that or other entity that was created in the United States by filing a document with a secretary of state or similar office or department of a state or Indian tribe. Foreign companies registered to do business in the United States by a state or Indiana tribe by a comparable filing also must report to FinCEN. Many big companies are exempt from FinCEN’s new reporting requirement because they already report ownership details with other federal regulators.

FinCEN has released a toolkit to help smaller entities prepare their filings. Businesses open before January 1, 2024 need to file before December 31, 2024 – even if the business closed or the LLC was dissolved in 2024. Businesses opened in 2024 have 90 calendar days to file after the company’s creation or registration with the state(s) in which it operates. From January 1, 2025 forward, new company’s will have only 30 days to file their reports with FinCEN. The toolkit is available here: https://www.fincen.gov/boi/toolkit. Companies required to report can file their reports here: https://boiefiling.fincen.gov.

FinCEN has estimated that filings will take less than 20 minutes to prepare.

The penalty for willfully not filing BOI reports with FinCEN can be as much as $591 per day as well as criminal penalties of up to two years imprisonment and a fine of up to $10,000. Penalties apply to filing false information or failing to correct or update reports previously filed containing beneficial ownership information.

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