Recent changes in federal legislation will result in a new status quo for New Mexico business owners. The Corporate Transparency Act goes into effect nationally on January 1st, 2024. This act will require businesses to report their beneficial owners. This post will explore when a report is necessary, what to include and and who to report to.
Who is Considered a Beneficial Owner?
The Corporate Transparency Act defines a beneficial owner as individuals who hold at least a 25% ownership interest in a company, or who otherwise exercise “substantial control” over a company. This means a report of beneficial ownership must include not only prominent shareholders, but also individuals who are high in the chain of command, such as CEOs, directors or chairmen. These requirements are and/or, meaning only one of the criteria has to be met in order for a report to be necessary. A CEO may not have any ownership of the company, but the CEO will still have to be reported as a beneficial owner due to the importance of that position.
What do I Need to Include in my Report?
These reports must include the following information about the beneficial owners:
- Full legal name
- Date of birth
- Current residential address
- A unique identifying number from an acceptable identification document
- The jurisdiction that issued the acceptable identification document
New Mexicans may use their state-issued driver’s license, or another identification document issued by the State of New Mexico, such as a concealed carry license.
If you are a citizen of a federally recognized Indian tribe, your tribal enrollment card may be used as a valid form of identification when submitting beneficial ownership information.
Federally Recognized tribes in New Mexico include the following:
- The 19 Pueblos of New Mexico (including Zuni)
- Ute Mountain Ute Tribe
- Navajo Nation (includes Ramah, Alamo reservations)
- Mescalero Apache Tribe of the Mescalero Reservation
- Jicarilla Apache Nation
Who do I Report to?
This information must be reported to FinCEN in a timely manner. FinCEN requires initial reporting of a business’ ownership be done within a year of the legislation taking effect (by January 1st, 2025). Additionally, FinCEN requires any changes in beneficial ownership (addition/removal of beneficial owners, changes in beneficial information such as a change of residential address) to be reported within 30 calendar days of the change.
These new requirements are a crucial change for all businesses. Failure to properly report beneficial ownership information can result in fines or even jail time. Because of this, it is always wise to consult a legal opinion for matters such as this.
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