Beneficial ownership information reporting is a key initiative introduced by the Financial Crimes Enforcement Network (FinCEN) under the Corporate Transparency Act (CTA), aimed at increasing transparency in corporate ownership and combating illicit financial activities.

Background

The Corporate Transparency Act, enacted in 2021, mandates that many entities doing business in the United States disclose information about their beneficial owners—individuals who ultimately own or control the company. This legislation is part of a broader effort to prevent money laundering, fraud, and other financial crimes by eliminating corporate anonymity that can facilitate these activities.

Who Must Report

  • Reporting Companies: The rule applies to corporations, limited liability companies, and similar entities created or registered to do business in the U.S. This includes both domestic and foreign entities.
  • Beneficial Owners: Defined as individuals who either exercise substantial control over the company or own at least 25% of its ownership interests. The rule aims to capture those who have significant decision-making power within the entity.

Reporting Requirements

Companies must file a beneficial ownership information (BOI) report that includes:

  • Company Information: Name and address of the reporting company.
  • Beneficial Owner Information: For each beneficial owner, companies must report:
    • Name
    • Date of birth
    • Address
    • Unique identifying number from an acceptable identification document (e.g., driver’s license, passport) along with an image of that document.

Filing Deadlines

Initial reports must be filed by specific deadlines:

  • Existing Companies: Those created before January 1, 2024, must file by January 13, 2025.
  • New Companies: Entities formed after January 1, 2024, have 30 days from their registration date to file their reports.

The submission of the Beneficial Ownership Information Report (BOI) is a requirement under the Corporate Transparency Act, with very few exemptions. You may file the BOI form at https://boiefiling.fincen.gov/.

For more information on reporting requirements, please refer to FAQs link here: https://www.fincen.gov/boi-faqs#K_1

ALERT: Carries a $500 fine per day up to 10k after the deadline date 01/13/2025

If you’ve already filed, that’s great! If you would require any assistance in filing for BOI, please feel free to let us know as soon as possible.

 

Disclaimer: This information has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors or consult us regarding your own personal tax situation as this article was intended to be general in nature.