Summary
Makes companies report who their real owners are to the government to help stop criminals from using these companies for bad things like terrorism or money laundering.
What does this bill do?
Requires reporting of true company owners
Forces corporations and LLCs to file a report with the Financial Crimes Enforcement Network (FinCEN) that lists all of their beneficial owners, including their name, date of birth, address, and an ID number.
Shares owner information with law enforcement
Allows FinCEN to provide the collected beneficial ownership information to local, state, tribal, and federal law enforcement agencies that request it for an investigation.
Establishes penalties for false information
Creates civil penalties up to $10,000 and criminal penalties of up to 3 years in prison for anyone who knowingly provides false ownership information or willfully fails to provide complete information.
Exempts certain types of businesses
Excludes many types of entities from the reporting requirements, including publicly traded companies, banks, credit unions, and businesses with more than 20 full-time employees and over $5 million in sales.
Requires annual updates on ownership
Mandates that all covered corporations and LLCs submit an annual filing to FinCEN listing their current beneficial owners and noting any changes from the previous year.
Creates a unique ID system for owners
Allows an individual to request a unique "FinCEN ID number" by providing their personal information once. This number can then be used in future company filings instead of resubmitting all personal details.
Requires federal contractors to disclose owners
Directs a change to federal rules to require any contractor bidding on a government contract above a certain value to provide their beneficial ownership information as part of the proposal.
Who does this affect?
- Owners of corporations and limited liability companies
- Federal, state, and local law enforcement agencies
- Financial institutions
What is the real world impact?
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Increases transparency to fight crime
Aims to stop criminals from using anonymous shell companies for illegal activities like money laundering and terrorism by making the true owners known to law enforcement.
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Creates a burden for small businesses
Requires millions of small businesses to collect and annually report detailed personal information on their owners to the government, which could be costly and time-consuming.
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Establishes a massive government database
Creates a large federal database of personal information about business owners, raising concerns about data security, potential for government surveillance, and misuse of private information.
What problem does this solve?
Criminals can easily create companies in the U.S. without saying who really owns them, which helps them hide illegal activities like money laundering and terrorism. This bill solves this by making companies report their true owners to a government agency, making it harder for criminals to hide.
When does this start?
This bill sets several deadlines for government agencies and companies, starting after it becomes law.
Rulemaking deadline
The Secretary of the Treasury must issue regulations to carry out the new reporting requirements within one year of the bill becoming law.
Reference
Text:
Section:
Sec. 5333(a)(3)(B)
Header:
Existing corporations or limited liability companies
Existing company compliance
Companies that were created before the law was passed have two years after the final rules are issued to submit their first beneficial ownership report.
Study on updating information
The Treasury Department must complete and report on a study about the need for companies to report ownership changes in real-time within one year of the bill becoming law.
Study on other legal entities
The Comptroller General must conduct a study on the lack of ownership information for other entities like partnerships and trusts and report to Congress within two years.