A New Requirement for Small Businesses (Including Most Farms): Filing a Beneficial Ownership Report with the Department of the Treasury. Deadline is January 1, 2025

There has been a lot of press, and more than a little confusion, regarding a new filing requirement by the US Department of Treasury for any business organized as a corporation, including Limited Liability Corporations (LLC). All corporate businesses are required to file, so don’t throw away that reminder/application that arrived in the mail recently! There are penalties for not filing by the deadline.

The following article is reprinted with permission from Cornell Cooperative Extension as it appeared in the 11/6/2024 CCE VegEdge e-newsletter.  

Written by Elizabeth Higgins, Cornell Cooperative Extension Associate in Ag Business Management/Production Economics, Eastern NY Commercial Hort Program, Hudson Valley Research Lab, Highland, NY

Beginning January 1, 2024, most small entities—including single member LLCs—must file online reports with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, disclosing information about the beneficial owners of the entities. This new reporting requirement—estimated to impact at least 32.6 million entities in 2024—was created by the Corporate Transparency Act (CTA). Existing entities have until January 1, 2025, to make their first beneficial ownership information (BOI) report.

Do I have to File?

If you are an LLC, Corporation, LLP or Limited Partnership in New York[NJ], yes you do.

Any entity created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe, unless excepted from the reporting requirement, must file. Examples of exempt entities include tax-exempt and government. (The list of exempt entities is in this FAQ.)

For-profit farms are not on the exempt list. Single-member LLCs are subject to BOI reporting requirements. Sole proprietorship farms are exempt since they do not file with the secretary of state in New York.

Why on Earth do I have to do this?

In 2021, Congress passed the Corporate Transparency Act on a bipartisan basis. This law creates a new reporting requirement as part of U.S. government efforts to make it harder for bad actors to use shell companies or opaque ownership structures to hide or benefit from ill-gotten gains.

What Happens if I Don’t File?

You should file because the penalties are large, and it is straightforward to file.

Failure to file a BOI report can result in severe civil and criminal penalties! If you don’t file a BOI report, you could face a $500-per-day fine, up to $10,000, and up to two years in prison.

==> Where to File: https://boiefiling.fincen.gov/fileboir.

How will this information be used and who can see it?

Beneficial ownership information reported to FinCEN is exempt from disclosure under the Freedom of Information Act (FOIA). FinCEN published the rule that will govern access to and protection of beneficial ownership information on December 22, 2023. According to the website, beneficial

ownership information reported to FinCEN is stored in a secure, non-public database using rigorous information security methods and controls typically used in the Federal government to protect non-classified yet sensitive information systems at the highest security level.

In accordance with the Corporate Transparency Act, FinCEN may permit access of beneficial ownership information to:

  • Federal agencies engaged in national security, intelligence, or law enforcement activity.
  • State, local, and Tribal law enforcement agencies with court authorization.
  • Officials at the Department of the Treasury.
  • Foreign law enforcement agencies, judges, prosecutors, and other authorities that submit a request through a U.S. Federal agency to obtain beneficial ownership information for authorized activities related to national security, intelligence, and law enforcement.
  • Financial institutions with customer due diligence requirements under applicable law (to facilitate compliance with those requirements).
  • Federal functional regulators or other appropriate regulatory agencies that supervise or assess financial institutions with access to beneficial ownership information (to supervise such financial institutions’ compliance with customer due diligence requirements).

What Information Will I have to Provide?

For the company:

  • Full legal name
  • Any trade name or “doing business as” name
  • Complete current U.S. address
  • Jurisdiction of formation (including State or Tribal jurisdiction for a domestic reporting company)

For each beneficial owner and each company applicant required to be reported:

  • Full legal name
  • Date of birth
  • Complete current address
  • Unique identifying number and issuing jurisdiction from one of the following non-expired documents:
    • U.S. passport
    • Identification document issued by a State, local government, or Indian Tribe
    • State-issued driver’s license
    • If none of the above are available, a foreign passport, and an image of the document from which the unique identifying number was obtained.

What is a “Beneficial Owner”?

In general, beneficial owners are individuals who:

  1. Directly or indirectly exercise “substantial control” over the reporting company, or
  2. Directly or indirectly own or control 25% or more of the “ownership interests” of the reporting company.

The rules for the program provide that beneficial owners do not include:

  • A minor child, provided the reporting company reports the required information of a parent or legal guardian of the minor child and states that the individual is the parent or legal guardian of a minor (once the minor child reaches the age of majority, the report must be updated).
  • An individual acting as a nominee, intermediary, custodian, or agent on behalf of another individual.
  • An employee of a reporting company, acting solely as an employee, provided that such person is not a senior officer.
  • An individual whose only interest in a reporting company is a future interest through a right of inheritance.
  • A creditor of a reporting company.

What are “Company Applicants”?

Companies created or registered before January 1, 2024, are required to report only beneficial owners. Companies created or registered on or after January 1, 2024, must report the company applicants, in addition to beneficial owners. Company applicants include:

  • The individual who directly files the document that creates, or first registers, the reporting company; and
  • The individual that is primarily responsible for directing or controlling the filing of the relevant document.

What is the “FinCen Identifier”?

An individual or reporting company may obtain a FinCEN identifier by submitting an application at or after the time that the reporting company submits its initial report. Each identifier is specific to the individual or reporting company. If an individual has obtained a FinCEN identifier, the reporting company may use that identifier in its report instead of reporting all of the required information for the individual.

Where Can I get More Information?

2024 South Jersey Commercial Fruit Growers Meeting

Date:                           March 12, 2024 (Tue)
Location:                    Rutgers Agricultural Research & Extension Center, 121 Northville Road, Bridgeton, NJ 08302
Pre-Registration:       Required, by March 11th.  Contact Joan Medany at (856) 224 – 8030 or  jmedany@co.gloucester.nj.us
                                    $20.00 (Checks only, made out to Rutgers University). Lunch, Coffee and Pastries Included
Pesticide Credits:      Requested for – CORE, PP2, 10, 1A [Read more…]

South Jersey Commercial Fruit Growers Meeting Program

Date:                           March 1, 2023 (Wed)
Location:                    Rutgers Agricultural Research & Extension Center, 121 Northville Road, Bridgeton, NJ 08302
Pre-Registration:       Required, by February 28th Contact: (856) 224 – 8030 or Email: jmedany@co.gloucester.nj.us
Registration fee        $20.00 (Checks preferred, made out to Rutgers University). Lunch, Coffee and Pastries Included
Pesticide Credits:      Requested for – CORE, PP2, 10, 1A [Read more…]

Cloth Face Covering Requirements for Customers and Employees

Covid guidelines for small buisnessesAs farms start-up their pick-your-own seasons we are becoming more aware of negative customer feedback on social media sites.  Comments have mostly been specific to the requirement of customers wearing face coverings while outside at a farm retail business.  Your farm is deemed an “essential retail business” allowing you to be open, but requiring you to follow state guidelines.  Customers are required to wear cloth face coverings at all times while at any essential retail business, including farm markets, farm stands, and pick-your-own locations.  Those with health conditions where a face covering would cause a negative impact on their health and children under the age of two are exempted from this requirement.   This season will be unlike any other you have had at the farm, and your customers experience will be different than what they are used to.  This season your farm has the opportunity to provide a safe place to obtain local, healthy food, and hopefully they will make a few good memories while practicing social distancing and using face coverings appropriately.

We have gathered resources to help convey the Governors Executive Orders, and their impacts to your farm operation, below.  The second link is the newly released NJDH printable poster outlining the requirements of all businesses allowed to operate during this time, including the mandate all operating businesses require customers and employees to wear face coverings.

NJ Executive Order 122 – Full length (see page 6, letter K for specifics)
“Require workers and customers to wear cloth face coverings while on the premises, except where doing so would inhibit that individuals health or where the individual is under two years of age.”

NJDH Guidance for Retail Businesses – Requirements for all Businesses Continuing to Operate (printable poster)
“Require workers and customers to wear cloth face coverings, and require workers to wear gloves.”

NJDH/NJDA/DOL Guidance for Migrant and Seasonal Farmworkers, Their Employers, and Housing Providers
“Workers must wear face coverings at all times, including during transportation, while working, and while in the presence of others.”