FinCEN.gov – Corporations will soon be required to disclose owner information

Re:FinCEN.gov – Corporations will soon be required to disclo... by LegionMammal978 on Friday September 15, 2023 @11:06PM (#37531661)

The exemption for "large operating companies" was adapted straight from the text of the 2019 Corporate Transparency Act [0] (at inserted subsection 5336(a)(11)(B)(xxi)) that this regulation is implementing; it's pretty much set in stone from FinCEN's perspective. The closest I could find to an initial rationale was in the statement given by Ron Wyden when he introduced a 2017 version of the bill to the Senate [1]:

> The bill is constructed to exempt many legitimate businesses, and the information requested is already provided by most companies in the normal course of business. Collecting beneficial ownership information at the time of incorporation relieves later compliance burdens for legitimate businesses, while at the same time prevents illegitimate businesses from operating in secrecy.

That is, the regulation should impact as few businesses as possible while still achieving its goals, so any company that fits into the mold of almost-certainly-not-a-secret-shell-company should be exempted if possible.

Regarding the "left-field fine", that's presumably why businesses have a 30-calendar-day period to report that they are no longer exempt. But obviously, that isn't going to help if the business is unaware of the reporting requirement. Perhaps the requirement on new businesses is expected to spread awareness before the requirement on existing businesses comes into effect.

[0] https://www.govinfo.gov/content/pkg/PLAW-116publ283/pdf/PLAW... (big PDF warning)

[1] https://www.congress.gov/115/crec/2017/08/02/CREC-2017-08-02...

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Re:FinCEN.gov – Corporations will soon be required to disclo... by ddmitriev on Saturday September 16, 2023 @12:30AM (#37532057)

Thank you for providing the context.

To me, it's the 20 FTEs requirement that is the most unexpected. The small businesses that I or the people I know have worked at or have interacted with were generally in the 2-10 FTE range.

For what it's worth, I personally have nothing against the spirit of this regulation. Corporations and LLCs are legal structures provided by the government. The (federal) government not always knowing who the beneficial owners are is an implementation artifact. FinCEN should have access to this information; I just wish that they would talk to the states about it instead of threatening individual owners with penalties and jail for not reporting to them directly.

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Re:FinCEN.gov – Corporations will soon be required to disclo... by rsynnott on Saturday September 16, 2023 @03:53AM (#37532866)

I suppose the theory is that if they exempted all businesses with paid employees and actual premises, someone might simply set up their shell company with an employee or two. 20 is probably too high a burden for all but the most dedicated crooks.

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