Beneficial Ownership Information (BOI)

Beneficial Ownership Information filings with FinCEN.

“In 2021, Congress enacted the Corporate Transparency Act. This law creates a beneficial ownership information reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.”

- U.S. Department of the Treasury, Financial Crimes Enforcement Network

FinCEN, short for Financial Crimes Enforcement Network, is the same department overseeing your annual foreign bank account report, or FBAR. They require compliance disclosures from all qualifying taxpayers to make it easier to identify and penalize the taxpayers attempting to circumvent the laws.

Willful violations of the BOI reporting requirements carry civil penalties of up to $500/day. Criminal penalties of up to $10,000 and two years in prison may also apply when reports contain false, inaccurate, or out of date information.

What companies need to file?

• Domestic Reporting Companies - Corporations, LLCs, and any other entity created in the U.S. registered with a secretary of state, similar state office, or tribe.

• Foreign Reporting Companies - A foreign company registered to do business in any U.S. state or tribe

Any Reporting Company [see Chart 1] that does not qualify for an exemption is required to file.  Exemptions are generally 1) financial businesses, 2) public utilities, 3) tax-exempt businesses, and 4) “Large operating companies [Exemption 21, listed below]”.  We’ve also included the full list of exempt companies for your convenience.

Who is a beneficial owner?

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.

An individual who exercises substantial control may be a:

1. Senior Officer

   • President CFO, GC, CEO, COO, or similar function.

2. Has authority to appoint or remove officers or directors

3. Important decision maker            

   • Directs, determines, or has substantial influence over the company’s business, finances, and structure

When does a Reporting Company need to file?

• There are three groups of businesses with different filing timelines:

  • Reporting Companies created prior to January 1, 2024 will have until January 1, 2025 to file.

  • Reporting Companies created January 1, 2024 – December 31, 2024 will have 90 days from effective registration date to file.

  • Reporting Companies created after December 31, 2024 will have 30 days from effective registration date to file.

• Additionally, any changes to beneficial ownership information must be reported within 30 days.

How does a Reporting Company file?

Beneficial Ownership Information reports can be filed online with FinCEN at https://www.fincen.gov/boi.  We recommend engaging a legal or accounting professional, ideally within the company, to complete these forms.  More guidance on these forms can be found here.  FinCEN also posted a short Youtube Video if you’d like to learn more that way.

If you want to discuss further to help determine if you have a Reporting Company or Beneficial Ownership, we’re happy to help.  We anticipate most businesses will file internally, but we’re also available if you need help filing this report.

List of 23 Specifically Exempt Companies