Break Glass To Read If You're a Small Business - 4
Heather Noggle
I integrate people, process, and technology. Cybersecurity Workforce | SMB Cybersecurity | Software Requirements | Data Integration | Business Analysis | Speaker | Writer | Systems Thinker
The Corporate Transparency Act bestows a data reporting requirement impacting almost every small privately held business and many large ones. Beginning January 1, 2024.
I give you a veritable ocean of governmentese lacking a clear, simple, common path and waves and waves of exceptions. Engage!
If you or someone you know registered a business LLC - even if it's dormant - read on.
They call it the "Beneficial Ownership Information Reporting Rule." "They" are FinCEN.
Giant penalty for non-compliance. So, again, read on.
??Who - people who own or control a company. The "beneficial owners."?
Some details:
??What - if you own a company - you need to report your information to the US government.? The website says "directly" or "indirectly" own. Same if you have control of a company - (most) officers in the company.
??Where - You'll be filing somewhere in FinCENdia, when they get that all developed.? Note, this is November of 2023, and the program takes effect January 1, 2024.
??When - if you have to file, do so before January 1, 2025. If you create a company after January 1, 2024, you have 30 days in which to file the information. You'll have to file an update yearly after that.
??Why (loosely) - FinCEN's trying to disrupt crime.
??How - "electronically through a secure filing system available via FinCEN’s website. This system is currently being developed and will be available before your report must be filed."
The form to fill out isn't created yet.
I am...refraining from comment at this time.
??????Digging Deeper
Who can access the PII you're providing the US Federal Government?
??Governing Organization
FinCEN.
??Impact
Failure to comply - because of lack of knowledge or because your elephant ate the computer and you had more pressing issues at the time - like the literal elephant with the appetite - may lead to the US government capability to purchase multiple new cars for its fleet.
Unpack this:
"The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in a civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure."
So riddle me this scenario.?
You started a business in 2022. One-person, home-based business doing some catering. Your wise family advised you to form an LLC, so you did. You don't use a computer much, make about $10,000 a year doing the food thing and never learn about this law. Your taxes are simple enough you don't use an accountant, and you never learn about this.
Until you do.
In May of 2025 - 5 months after the initial filing compliance date - that's when you do. Lessee - that's about 150 days at 500 a day you're open to.? Oh, hello, $75,000. Door #2 - criminal penalties.
Who wrote this to where we penalize the home-based caterer wise enough to open an LLC the same as the giant private company?
领英推荐
??Communication
Navigate the PDF - here's the link again. And watch the FinCEN BOI site. I'm hopeful this gets less opaque or - better yet - delayed.? Talk with your accountant and attorney about when to file.
Share the info with others.
The main site: https://www.fincen.gov/ , https://www.fincen.gov/boi
The PDF "small" guide: https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide_FINAL_Sept_508C.pdf
Thoughts
Oh, "boi"
Like with most major government initiatives, (most of) the information you'll need is there, but that last writing initiative to make it useful - not there.
The result from implementation and penalties and non-communication beyond a website dump may be catastrophic. Filing will be incomplete and lackluster.
What on earth does this solve for the government?
Your tax dollars are paying for this. ??
Do you see a legal nightmare that will translate into decreased legal help available for small businesses? Burden placed on lawyers as well here who helped in creation of these companies. Look at page 42 of the "small" guide PDF (labeled page 36). Last paragraph.
CTA
Again - be knowledgeable, and share the information with others.? Share this if it's helpful.
Onward...
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-
I'm returning from 3 conferences and going into planning for a few events. Detailed content's probably only every other day.
The conferences:
??Springfield Business Journal's Business Expo. ?? Racheal ‘Dami’ Odunewu was one of the speakers there. Aside: She and I are teaming up with Jonathan Bell and others for the Ultimate Team Party coming up in a couple of weeks! Dami puts on an amazing event full of stories and other engaging content. Still time to register (I think a few slots are left) - Google Ultimate Team Party, and you'll find us.
??Northwest Arkansas (NWA) Tech Summit - 3 days of amazing content, much of it AI related. Entrepreneur sessions as well. Retail sessions. Met a bunch of great people, and I'm still distilling content notes. If you happen to have attended, please leave your favorite conference takeaway either in the comments or via a DM.
??Joplin Regional Innovation and Tech Summit - Great sessions, more great people. Also, I performed virtualized rubber band surgery and drove around a Stokes Robotic Dog. Way cool! Saw old friends and made some new ones. Same thing here - leave your favorite conference takeaway.
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-
Looking ahead - a couple of podcasts - one scheduled, one about to be. Speaking at the Springfield Area Chamber of Commerce as a roundtable host today. Springfield Tech Council has the Excellence in Tech awards on Friday.
Tomorrow I'll debut - and hope to start taking registration for - a small-setting conversation at efactory on the morning of November 27th. Up to 17 people - super small organizations and cybersecurity. Hour and a half seminar.
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-
Back to the basics with your cybersecurity journey next edition. Entrepreneurs got the front billing this time.
Be safe online.
Book an appointment with me via my LinkedIn profile if you'd like to talk about it.
Engage Talent with Impact. Your Fractional Resource.
1 年Thank you Heather for this informative article! There’s so much for small business to navigate and being aware of new requirements like this is so helpful!
Owner: Step into your post-exit adventure with clarity and purpose ?? I'm a 4th Quarter Coach, experienced COO/CEO, strategic planner, project manager, keynote, author, coffee connoisseur
1 年thanks for taking the lead in trying to understand this program.
Financial Planner
1 年Heather, if my customers data is only kept and managed by a Broker-Dealer, do I have to report? I wouldn’t be able to surrender any customer data, the request would have to go to Prudential. I only have remote access as long as I’m contracted with them. Thanks for posting this and thanks for your reply.
A better way to protect your company against ransomware | Many backups fail to recover. We fix that.
1 年Add this to the long list of government gotchas. I wonder if congresspeople who are given interests in companies by the lobbyists will have to register?
?? Hey, I’m JB—a Gen Z entrepreneur who launched a biz during a global pandemic at 15 and never looked back. Now, as the founder of That GenZ Agency ?, I help brands truly understand and connect with my generation.
1 年Thanks for this Heather, I def need to chat with you further about this!