New Beneficial Ownership Reporting
Happy April everyone! Spring is finally here!
Thank you for being here. We know you will find some really useful information in this newsletter and we would love to hear from you.
Business Owners need to be aware of for 2024
Just when you thought the governmental reporting requirements for your business were done, the Federal Government has another new reporting requirement that is expected to go in effect by year end 2024 and is specifically directed at small businesses and Shell Company owners. If you are not familiar with the Corporate Transparency Act which was passed as part of the National Defense Authorization of 2021, you will need to quickly get up to speed – or risk fines of $10,000 for failure to report your company ownership information to the Feds.
The basic idea is that the Feds are attempting to require all small business owners and beneficial owners to provide the Financial CrimesReporting Network a copy of their photo ID, address, and any other identifiable information by end of the year 2024 or within 90 days of any new business entity formation. Yes, this is the same organization that was found by Congress a few months ago to obtain financial purchase information without a warrant with cooperation. The “Too Big to Fail” Banks and Credit Card issuers can obtain customer’s financial transactions that have been purchased from certain retailers based on key word searches in the bank’s databases. The National Small Business Association (NSBA) did win a lawsuit in March to prevent the unconstitutional compliance of this new reporting act and other lawsuits are pending. The ruling is being appealed by FICEN and FICEN views the court’s ruling only to apply to then current members of the NSBA – not the majority of small business owners or future members of NSBA. The court case was not a class action lawsuit.
Business owners should also watch out for scammers using this new reporting requirement to obtain personal information. You should only file your reporting info directly with FICEN and not with any 3rd party soliciting you for their services. In fact, scams are already occurring to such an extent that FICEN is issuing warnings on their website about the scams. For business owners not part of NSBA or those who wish to file with FICEN before the Appeals Court decision is reached, it can be done directly on their website at https://www.fincen.gov/boi. Current deadlines for filing are December 31, 2024.
Profitability Check – Is recent inflation impacting your profits?
In the not-too-distant past, business owners could plan on looking at increasing their pricing only once a year; however, it appears that this can no longer be the case for the foreseeable future due to the continual increase in fuel, energy, food, and other costs that go into providing your services and products to your market. Make sure that you are leveraging your accounting processes to get a real time update on your business overhead expenses and Cost of Goods Sold expenses. Be sure to incorporate this info into a quarterly pricing models review to make sure you are not operating at a loss for the second quarter. Increasing overhead and Cost of Goods Sold is the silent thief that will quickly eat away at your business profits unless you are implementing a consistence review of your cost structures and have made the relevant adjustments to maintain profits. For example, a small business operating at an annual 5%net profit will often see profits cut by more than half by only a 5% or 10% increase in overhead or other input cost. This of course depends on the business’s specific cost structure and ability to obtain additional revenue. If you need help with reviewing your Overhead, COGS, and forecasted business profits, please reach out to P&L Business Solutions for assistance.
We are here to help.
www.PandLBusiness.com
(888) 20-BOOKS
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