WHAT IS IT?
Beneficial Ownership Information (BOI) reporting is a requirement under the federal Corporate Transparency Act (CTA) that began on January 1, 2024. The CTA requires certain US and foreign entities to file a BOI report with the Financial Crimes Enforcement Network (FinCEN), a bureau of the US Department of Treasury. The report lists the individuals who own or control a company, including their names, addresses, and identifying documents.
Beneficial owners are individuals with at least 25% ownership or those exercising substantial control over an entity.
WHY IS IT REQUIRED?
The purpose of BOI reporting is to strengthen the US financial system by making it more difficult for criminals to use shell companies to hide assets or launder money. It can also help establish trust with legitimate businesses and owners and help identify risk exposure.
WHO IS REQUIRED TO REPORT AND WHO IS EXEMPT?
If you are unsure you need to file – are you an LLC in the US? You are exempt if your business falls into the one of the following categories:
- Securities reporting issuer
- Governmental authority
- Bank
- Credit union
- Depository institution holding company
- Money services business
- Broker or dealer in securities
- Securities exchange or clearing agency
- Other Exchange Act registered entity
- Investment company or investment adviser
- Venture capital fund adviser
- Insurance company
- State-licensed insurance producer
- Commodity Exchange Act registered entity
- Accounting firm
- Public utility
- Financial market utility
- Pooled investment vehicle
- Tax-exempt entity
- Entity assisting a tax-exempt entity
- Large operating company
- Subsidiary of certain exempt entities
- Inactive entity
*If you are an LLC and not exempt – you MUST file before January 1, 2025. The penalty to not file is $600 per day after the deadline.
WHEN IS THE DEADLINE TO REPORT?
Entities in existence as of December 31, 2023, have until December 31, 2024, to file their initial report. An entity formed during 2024 will have 90 days to file its initial report, per updated guidance provided by FINCEN in late November 2023.
The BOI reporting is not an annual or recurring filing, but if there are any changes to your business, please update your report within 30 days.
WHO FILLS OUT THE REPORT?
Because the BOI reporting is a matter of legal compliance, Innovative Accounting cannot make the filing on behalf of our clients. We encourage our clients to review our explanation of the BOI reporting rules and the information provided at the FINCEN FAQ page. If you determine that you have a filing requirement and understand the information you are required to provide, you can make the filing directly to FINCEN by using the FINCEN e-filing system.
If you need assistance to determine whether you have a BOI reporting requirement, we are advising our clients to work with their attorneys to make that determination and assist with the legal filing. There are also a number of corporate compliance service companies that can assist with the filing, for a reasonable fee.
HOW IS THE REPORT SUBMITTED?
Reports can be filed electronically using the BOI E-Filing System. They only need to be submitted once, unless the filer needs to update or correct information.
- Click FIle Online BOIR (https://boiefiling.fincen.gov/fileboir)
- If your company existed before January 1, 2024, choose a. Initial Report – Next
- Enter your legal name & and DBAs you use
- Enter #7 as EIN and #8 as your EIN number
- Enter #10 as United States of America if formed in the U.S, the state or tribal jurisdiction your business was incorporated in
- Enter #11 as the current business address
- Enter #16 – check box if your company existed before January 1, 2024 – Part II will not be required – Click Next
- Enter Beneficial Owner Information for EACH owner or member of the company who exercises substantial control (even if not an owner). This includes any owner that owns 25% or more of the company AND any individual who:
- Is a senior officer.
- Has authority to appoint or remove certain officers or a majority of directors of the company.
- Is an important decision maker.
- Has any other form of substantial control over the company (a “catch-all” to ensure that innovative or flexible corporate restructures still report).
- Beneficial Owner Information will require their name, date of birth, address, form of identification, and an image of their identification.
- Complete fields indicating that you are authorized to submit this report on behalf of the company.
NEED MORE HELP?
For more information and resources: https://boiefiling.fincen.gov/help
