Beneficial ownership information reporting
Beginning on January 1, 2024, many companies in the United States will have to report information about their beneficial owners, i.e., the individuals who ultimately own or control the company. They will have to report the information to the Financial Crimes Enforcement Network (FinCEN). FinCEN is a bureau of the U.S. Department of the Treasury. Beneficial ownership reporting is a requirement of the Corporate Transparency Act of 2021.
To stay legally compliant, you’ll need to meet external and internal business compliance requirements. Most external requirements involve filing paperwork or paying taxes with state or federal governments.
Internal business requirements are for your own record keeping. You should document your compliance with internal requirements closely with company records. You might need them when you decide to sell your business or if a legal action is taken against your business.
Requirements by business structure
Corporations have the strictest internal requirements. Corporations should hold initial and annual director and shareholder meetings, record their meeting minutes, adopt and maintain bylaws, issue stock to shareholders, and record all stock transfers.
LLCs have less strict internal requirements. However, they are generally advised to maintain an updated operating agreement, issue membership shares, record all membership interest transfers, and hold annual meetings.
Other business structures have few, if any internal requirements. However, it’s rarely a bad idea to document important decisions with your business.
Ongoing state filing requirements
Annual report or biennial statement. Most states require one or the other. Some states set the due date on the anniversary of the business formation date, and other states pick a specific day for all businesses.
Statement filing fees. Fees normally accompany the annual report or biennial statement, which can exceed $300.00.
Franchise tax. Some states charge franchise taxes for corporations or LLCs that operate with their border. Formulas vary by state.
Initial reports. Some states require initial reports and fees shortly after incorporation.
Articles of Amendment. If you’ve made important changes to your company — like address, name, new shares, or membership — report it with articles of amendment.
Ongoing federal filing requirements
Most businesses won’t have federal requirements beyond paying federal taxes and complying with the Affordable Care Act. Make sure that you meet all federal tax obligations, including income and employer taxes.
The Affordable Care Act requires businesses with 50 or more employees to report to the IRS that they provide health coverage.
If your business has any federal licenses, permits, or certificates, you’ll need to keep those up to date.
Other federal requirements
Licenses, permits, and recertification
The documents for staying legally compliant vary based on your industry and location.
Maintain any licenses, permits, or certificates your business received from your state, city, or county. Renewal requirements vary, so it’s best to check with local business licensing offices.
For example, most restaurants need to regularly renew health and safety certificates. Businesses that sell regulated items like tobacco, alcohol, or tires might need to regularly renew their sales permits. For professional services like plumbing or nursing, the state might require certification with a third-party board to keep your license.
For federal licenses, permits, and certificates, check with the issuing institution to confirm renewal requirements for your business. Here’s a list of some common federal agencies and departments that small businesses register with: