Corporate Transparency Act Requires LLCs to Provide Owner Information
When it comes to trucking companies, two of the most common forms of business structure are the sole proprietorship and the Limited Liability Company (LLC). If you own or are part of a trucking company that is the latter, you may be required to register information with the Financial Crimes Enforcement Network (FinCEN) before 2024 comes to a close.
Details
The Corporate Transparency Act went into law in 2021, and with it, a new requirement started on January 1st, 2024. This requirement states that those with at least a 25% ownership stake in an LLC, as well as those who file on behalf of the LLC, must give their information to FinCEN, in an effort to better track who owns what to deter money laundering and tax evasion.
For each qualifying person regarding the LLC, FinCEN will require their:
- Name
- Date of birth
- Address
- Proof of an unexpired U.S. driver’s license, U.S. passport, or state ID.
If the LLC was created in 2024 or later, they have 90 days from the LLC’s registration to provide the information to FinCEN. For LLCs created before the new requirement became official, they are given until the very start of 2025 as a reporting deadline.
The requirement is called Beneficial Ownership Information, and FinCEN has a webpage where applicable people can file and ask further questions.
Conclusion
If you play a substantial role in an LLC as outlined by FinCEN, you should be sure to register as soon as you can: failure to submit information or willingly submitting false information can lead to penalties of $500 per day, and in worst-case scenarios can even result in up to two years in prison time.
Alternatively, a person with substantial ownership in an LLC can avoid the rule by relinquishing enough of their share so that they fall below the 25% threshold. If that is the case that would be preferred for your trucking company, that is an option. Additionally, there is an exemption if the LLC is a “large operating company”, but it is not a viable option for LLCs with less than $5 million in annual revenue.
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