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Beneficial Ownership Information (BOI) Reporting Requirements

Beneficial Ownership Information (BOI) Reporting Requirements

March 25, 2024

To enhance transparency and combat financial crimes, starting from January 1, 2024, companies in the United States must report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a U.S. Department of the Treasury bureau. A beneficial owner is one who directly or indirectly exercises substantial control over the reporting company or owns or controls at least 25 percent of the company’s ownership interest.

Reporting Companies

Two types of reporting companies: domestic and foreign. A domestic reporting company is a corporation, limited liability company (LLC), or any entity created by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe. A foreign company is registered to do business in any U.S. state or Indian tribe by such a filing.

Twentythree types of entities are exempt from BOI reporting requirements, including publicly traded companies, nonprofits, and certain large operating companies as well as 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, statelicensed insurance producer, commodity Exchange Act registered entity, accounting firm, public utility, financial market utility, pooled investment vehicle, taxexempt entity, entity assisting a taxexempt entity, large operating company, subsidiary of certain exempt entities, and inactive entity.

Timing

FinCEN started accepting BOI reports on January 1, 2024. Companies that existed before January 1, 2024 will have until January 1, 2025 to file their initial reports, while new entities formed on or after January 1, 2024 have 90 days from the completion of their state registration.

Starting in 2025, new companies will have 30 days after receiving actual or public notice to file their initial reports.
BOI reporting is not an annual requirement. The report only needs to be submitted once. Any updates or corrections to beneficial ownership information previously filed with FinCEN must be submitted within 30 days.

What information to include

Reporting company information must include full legal name, any trade names or “doing business as” (DBA) names, current address, the state where the company was formed, Taxpayer Identification Number (TIN), including an Employer Identification Number (EIN) and the state or tribal jurisdiction of initial registration (in the case of a foreign reporting company).

BOI reporting requirements fall into two categories: reporting company information and beneficial ownership information.

Beneficial ownership information must include full legal name, date of birth, current address, ID number, jurisdiction, and an image of one of the following nonexpired documents: U.S. passport, state driver’s license, identification document issued by a state, local government, or foreign passport if none of the above are available or applicable.

Penalties

According to 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 person may also be subject to criminal charges of up to two years in jail and a maximum fine of $10,000. Potential violations include willfully failing to file a BOI report, willfully submitting false information, or willfully not updating or correcting the information when needed.