NEW BENEFICIAL OWNERSHIP INFORMATION (BOI) REPORTING REQUIREMENT
What is it?
The Beneficial Ownership Information (BOI) reporting rule is part of the Federal Corporate Transparency Act (CTA) that was recently passed. It requires certain entities to report ownership information to the Financial Crimes Enforcement Network (FinCEN), which is part of the U.S. Department of the Treasury. However, the reporting requirement is not part of the tax code and is not filed with the IRS, therefore, we encourage you to consult with your legal advisor regarding BOI and reporting to FinCEN.
What is the penalty for noncompliance?
According to FinCEN, potential “civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000.”
What is the deadline to file?
January 1, 2025 for all entities that were formed prior to 2024. New entities created in 2024 must file within 90 days of formation, and new entities created after 2024 must file within 30 days of formation. Further, if there is any change to the required information about your company or its beneficial owners in a BOI report that your company filed, your company must file an updated BOI report no later than 30 days after the date on which the change occurred.
Who must file?
There is a framework to determine which types of entities are exempt (e.g., certain tax-exempt entities, large operating companies), but generally any corporation, limited liability company, or any other entity (e.g., limited liability partnership, most limited partnerships) that is created by filing a document with a secretary of state or similar office under state or tribal laws, or is formed under foreign law and registered to do business in the United States by filing a document with a secretary of state or similar office under state or tribal laws, is a reporting company that must disclose information regarding its beneficial owners and its company applicants to FinCEN.
For more information regarding exemptions, please refer to the “Where do I find additional information about the BOI” section below.
What type of information is collected?
- Legal Name
- Any trade or d/b/a names
- Current address
- State, tribal, or foreign jurisdiction of formation (and registration for a foreign company)
- Taxpayer identification number (if a foreign reporting company has no TIN, then a tax identification number issued by a foreign jurisdiction)
Beneficial Owner (and Company Applicant for entities created in 2024 or later) information – Any individual who, directly or indirectly, either exercises substantial control over a reporting company or owns/controls at least 25% of the ownership interest of a reporting company.
- Full legal name
- Date of birth
- Current address
- Unique identifying number and issuing jurisdiction information from an image of a passport or state driver’s license
- Note an individual who provides his or her information directly to FinCEN can obtain a unique identifying number assigned by FinCEN (“FinCEN identifier”). The FinCEN identifier can then be provided on the report instead of the required information about the individual.
How do I file BOI?
Your BOI can be filed directly on the FinCEN website: https://www.fincen.gov/boi
Where do I find additional information about the BOI?
- https://www.fincen.gov/boi – Brochure Introduction to BOI Reporting
- https://www.fincen.gov/boi-faqs – Frequently Asked Questions
Disclaimer: The information above is provided for information purposes only. It is not intended to be legal or tax advice. Determining BOI reporting requirements is legal in nature, and we encourage you to contact legal counsel to determine how the CTA will impact your business.