Missouri small businesses drive economic growth and foster innovation. As these Missouri small businesses are formed and grow, the owners must also navigate an often complex regulatory landscape. Administrative rules and regulations change frequently. These changes may often have good intentions, like promoting transparency and accountability. One such regulatory requirement that Missouri small businesses need to be mindful of is the filing of beneficial owner information with the Financial Crimes Enforcement Network (FinCEN).

Understanding Beneficial Ownership

A beneficial owner is an individual who directly or indirectly owns or controls a significant portion of a business. This includes those who exercise substantial control over the management or operations of the business. Identifying these individuals helps to prevent illicit financial activities such as money laundering, fraud, and terrorist financing.

FinCEN and Its Role

FinCEN, a bureau of the U.S. Department of the Treasury, was formed to safeguard the financial system from abuse by promoting transparency and accountability. One of its key initiatives is the collection and analysis of financial transactions to combat money laundering and other financial crimes. FinCEN determined that the collection of beneficial ownership information necessary for FinCEN’s efforts to enhance transparency within the business sector.

Missouri Small Businesses and FinCEN Filing Requirements

FinCEN introduced a rule requiring certain businesses to disclose information about their beneficial owners. Missouri small businesses, like their larger counterparts, are subject to these requirements. The rule applies to various entities, including corporations, limited liability companies (LLCs), and other legal entities.

Key Components of FinCEN Filing

1. Who Qualifies: Missouri Small businesses that fall within the scope of the rule must submit information about their beneficial owners. This typically includes individuals who own 25% or more of the business or exercise significant control over its operations.
2. Information Required: FinCEN filings typically include details such as the beneficial owner’s name, date of birth, address, and a unique identifying number (e.g., a driver’s license or passport number). Businesses may need to update this information periodically to ensure accuracy.
3. Confidentiality: While the information is filed with FinCEN, it is not publically disclosed. This ensures a balance between transparency and the protection of sensitive business information.

Steps for Missouri Small Businesses

1. Know Your Obligations: Missouri small business owners should familiarize themselves with FinCEN requirements and determine whether their business falls within the scope of the rule.
2. Gather Necessary Information: Collect accurate and up-to-date information about beneficial owners, including their names, addresses, and identification numbers.
3. Seek Professional Guidance: If uncertain about compliance requirements, consider seeking the guidance of legal or financial professionals.

Conclusion

FinCEN’s beneficial ownership requirements adds an additional layer of administrative responsibility for Missouri small businesses. Compliance is mandatory, beginning January 1, 2024.

We’re Here To Help

Our goal is to help clients be successful in their business endeavors. If you own a Missouri small business, or plan to start one, the business law attorneys at Kennedy, Kennedy, Robbins & Yarbro, LC can help. We can review documents to help you avoid paying unnecessary fees and expenses.  Contact us or call us at (573)686-2459. We’re here to help.