You May Need To File A BOI Report
The deadline to file for entities formed before 2024 is January 1, 2025.
Why You Need To Know About Beneficial Ownership Information Reporting And The January 1, 2025 Deadline
In 2021, Congress passed the Corporate Transparency Act. This law creates a new Beneficial Ownership Information (BOI) Reporting requirement as part of the U.S. government’s efforts to prevent illegal money laundering through shell companies or other ownership structures. Effective January 1, 2024, many companies in the U.S. must report information about their beneficial owners—the individuals who ultimately own or control the company—to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.
There are significant penalties for failing to complete your BOI report. As specified in the Corporate Transparency Act, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. A person who willfully violates the BOI reporting requirements may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000.
What You Need To Know About BOI
Your company may need to report information about its beneficial owners if it is:
A corporation, a limited liability company (LLC), or was otherwise created in the U.S. by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
A foreign company and was registered to do business in any U.S. state or Indian tribe by such a filing.
A beneficial owner is any individual who directly or indirectly:
Exercises substantial control over a reporting company; OR
Owns or controls at least 25 percent of the ownership interests of a reporting company.
There is no maximum number of beneficial owners for an entity. Beneficial owners must be individuals (i.e., natural persons), trusts, corporations, or other legal entities are not considered to be beneficial owners.
How To Report Your BOI
Reporting companies report beneficial ownership information electronically through FinCEN’s website: www.fincen.gov/boi. BOI reporting is not an annual requirement, and there is no fee to file the report. Unless a company needs to update or correct information, a report only needs to be submitted once. The information required on the BOI report includes details about the beneficial owners (name, DOB, SSN and a scanned copy showing proof of identity), information about the entity (name, DBA, type, address, jurisdiction of formation and registration, and tax ID number), as well as other additional information. https://www.fincen.gov/sites/default/files/shared/BOI-Notice-to-Customers-508FINAL.pdf
If your company was created or registered prior to January 1, 2024, you must file by January 1, 2025 to report BOI.
If your company is created or registered in 2024, you must report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.
If your company is created or registered on or after January 1, 2025, you must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 days.
23 types of entities are exempt from BOI reporting requirements. See FinCEN’s “Small Entity Compliance Guide” at: https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide.v1.1-FINAL.pdf.
Warning: Scam Alert!
FinCEN has posted an alert regarding recent fraudulent attempts by hackers to solicit information from individuals and entities who may be subject to BOI reporting requirements. These fraudulent scams may include: correspondence requesting payment (there is NO fee to file BOI directly with FinCEN); correspondence that asks the recipient to click on a URL or to scan a QR code; correspondence that references a “Form 4022,” (FinCEN does not have a “Form 4022”) an “Important Compliance Notice” or a “US Business Regulations Dept” (there is no government entity by this name).
We Can Help
Our attorneys at Grady H. Williams, Jr, LL.M., Attorneys at Law P.A. can help you prepare your BOI report, so you can file it on FinCEN’s website.
Alternatively, our attorneys can prepare and file the report for you. For additional information and fees for our services, please contact our office.
