What is the new Beneficial Ownership Information (BOI) reporting requirement? And do I need to report?

Starting on January 1, 2024, many companies in the United States will have to report information about their “beneficial owners” to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) under a new law called the Corporate Transparency Act. This is part of an effort to combat financial crimes by making it harder for bad actors to hide behind shell companies.

What is a beneficial owner?

A beneficial owner is an individual who ultimately owns or controls a company. Specifically, you need to identify people who own 25% or more of your company’s equity interests. You also need to report anyone who has significant responsibility for controlling or managing the company, like a CEO, CFO, board member, or other senior officer.

What information has to be reported?

For each beneficial owner, you need to report their full legal name, birth date, address, and a unique identification number from an acceptable ID like a driver’s license or passport.

Which companies have to report beneficial ownership information to FinCEN?

Most domestic companies formed by filing documents with a state or tribal office, like corporations and LLCs, have to report. Exceptions include publicly traded companies, large operating companies meeting certain criteria, charities, and a few other entity types.

Foreign-owned companies registered to do business in the U.S. also have to report their beneficial owners.

When is the reporting deadline?

If your covered company was formed or registered before January 1, 2024, you have until January 1, 2025 to submit your initial report. Companies created or registered on or after January 1, 2024 must report within 30 days.

How do I report beneficial ownership information?

FinCEN is launching an online reporting system that will open on January 1, 2024. You will submit your reports electronically through their website.

The bottom line: Most domestically created entities like corporations and LLCs have to report ownership information to FinCEN starting in 2024-2025. This includes both companies owned by U.S. citizens and foreign-owned companies registered in the U.S. Review the requirements and exceptions to determine if your company needs to report.

For more information visit the fincen.gov