Beneficial Ownership Information Reporting (BOI) stands as a critical component in financial transparency, aiming to combat money laundering and illicit financial activities. Filing BOI reports with the Financial Crimes Enforcement Network (FinCEN) is a mandatory process for various entities, ensuring a clearer understanding of the individuals behind a company or entity.

Below you can find basic information and topics for Beneficial Ownership Information Reporting (BOI).

What is beneficial ownership information?

Beneficial ownership information (BOI) is identifying information about the individuals who directly or indirectly own or control a company in the United States. This includes individuals owning 25% or more of the entity’s equity or those with significant control or influence over its operations.

 Why do companies have to report BOI?

Congress passed the Corporate Transparency Act in order to make it harder for bad actors to hide or benefit gains through shell companies or other opaque ownership structures.

What companies must report BOI?

Domestic companies: Corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States.

Foreign companies: Entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office.

Are some companies exempt from the reporting requirement?

Yes, 23 types of entities are exempt from the beneficial ownership information reporting requirements including publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies Full list can be found on FinCEN website.

How will I report my beneficial ownership information?

You can file electronically through a secure filing system available via FinCEN’s website yourself or use a third-party service provider.

When to file BOI reporting?

If a company is created or registered before January 1, 2024, the reporting company will need to report information until January 1, 2025.

If a company is created or registered on or after January 1, 2024 and before January 1, 2025, the reporting company will have 90 calendar days after receiving notice of the company’s creation or registration to file its initial BOI report.

Are there any penalties for violating BOI reporting?

A person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. That person may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000.

References;

FinCEN Frequently Asked Questions (FAQs). Beneficial Ownership Information Reporting Rule.
https://www.fincen.gov/boi-faqs

Disclaimer
This article is intended for informational purposes and should not be taken as legal or tax advice. You must consult with your tax, financial or legal adviser about your unique financial situation before acting on anything discussed in this article. TaxBasket LLC is providing informational content for general guidance to help small business owners become more aware of certain issues and topics and this article must never be considered as a substitute for advice provided by your tax, financial or legal advisers. TaxBasket LLC or its members cannot be held liable for any use or misuse of this content.