Beneficial Ownership Information Reports: What to know

On January 1, 2024, a new compliance reporting mandate will require the majority of small businesses registered at the state level to file a Beneficial Ownership Information (BOI) Report with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).

The Corporate Transparency Act requires a broad range of businesses to file a report with FinCEN identifying those who own, control, and formed the company. At this time, the report only requires business owner identification details and does not require any financial information. 

We’ll give you a rundown on what you need to know about this new reporting requirement so you don’t have to worry about any headaches.

Here are some important pieces of information to remember:

• Beginning January 1, 2024, many businesses must file a new Beneficial Owner Information Report with the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN). 
• Filing the BOI report after the deadline could result in a fee of up to $500/day.
• This new requirement doesn't include any additional financial reporting at this time.

Tell me again, what is a Beneficial Ownership Information (BOI) Report?

The Beneficial Ownership Information (“BOI”) Report is an information report that requires certain domestic companies and foreign companies registered to do business in the U.S. to file reports with FinCEN. This report will identify the entity’s beneficial owners and the persons who applied to create or register the business. Only one owner of a business is required to file this report.

Who has to file a BOI report?

Every domestic and foreign corporation, LLC, or other entity registered with a Secretary of State or similar office under their state or Indian tribe is required to file a BOI report unless the entity qualifies for an exemption. 

There are 23 types of entities that are exempt from reporting requirements. These entities included, but are not limited to, large operating entities, publicly traded companies, banks, and other entities. 

It’s worth mentioning that sole proprietorships and others who have not incorporated their business at the state level are excluded from this reporting requirement. 

Why do I have to file a beneficial ownership information report?

In an effort to increase transparency, Congress passed the Corporate Transparency Act to collect certain information that will help towards the effort of anti-money laundering. 

What information am I required to provide?

The report must state several key pieces of information: 

• The reporting company’s full legal name 
• Any trade or “doing business as (DBA)” names 
• The complete current street address of the principal place of business 
• The jurisdiction of formation 
• The taxpayer identification number

The report must also include information on beneficial owners. Information for beneficial owners should include their names, dates of birth, addresses, and a unique identification number from an approved document, such as a driver’s license or passport. 

Am I a Beneficial Owner?

A Beneficial Owner is an individual who, directly or indirectly, has substantial control over the reporting company, or they may own or control at least 25 percent of a company’s ownership interests. If you owned, formed, or control a company, then you may be a beneficial owner. 

Is this like filing a tax return?

It’s more like filing an additional annual report or updating your Google Business Profile than filing a tax return. This report is informational, and it’s meant to allow transparency into a business’s ownership interest and the individuals who play a role in the control of the business.

When do I have to file BOI?

Companies registered to do business in the United States before January 1, 2024, that fall within the guidelines (i.e. domestic and foreign entities that have legally formed under state or tribal laws), are not required to file their reports until January 1, 2025.

Other required companies created or registered on or after January 1, 2024, must file their reports within 30 calendar days of receiving notice that the company’s creation or registration is effective. These reports are to be filed with FinCen.

What happens if I don’t file the BOI on time?

If you file the Beneficial Ownership Information (BOI) Report after the deadline, you could be charged up to $500 for every day that it is late, and up to $10,000 total. That’s right, up to $500 a day. That adds up quickly, so mark your calendars so you don’t miss this important deadline.

How do I file a BOI?

Businesses will report beneficial ownership information to FinCEN electronically through a secure filing system on FinCEN's website. The system will be available before filing is required, but it’s not available currently. 

Worried about filing your BOI report?

New reporting requirements can be intimidating, but ComplYant is here to help. Use the chat window in the bottom right-hand corner of your screen to message our Customer Success team. They'll be happy to assist you with any lingering questions. When you sign up for ComplYant, you will also receive reporting reminders to keep you on track with filing deadlines.