New Mandatory BOI Reporting
FinCEN (Financial Crimes Enforcement Network) is requiring all small business owners (23 exemptions) to file BOI (Beneficial Ownership Information) report, by 1/1/2025.
What is beneficial ownership information?
Beneficial ownership information refers to identifying information about the individuals who directly or indirectly own or control a company.
Why do companies have to report beneficial ownership information to the U.S. Department of the Treasury?
In 2021, Congress passed the Corporate Transparency Act on a bipartisan basis. This law creates a new 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.
What are the deadlines for reporting?
FinCEN launched the BOI E-Filing website for reporting beneficial ownership information (https://boiefiling.fincen.gov) on January 1, 2024.
· A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial BOI report.
· A reporting company created or registered in 2024 will have 90 calendar days to file after receiving actual or public notice that its creation or registration is effective.
· A reporting company created or registered on or after January 1, 2025, will have 30 calendar days to file after receiving actual or public notice that its creation or registration is effective.
Will there be a fee for submitting a beneficial ownership information report to FinCEN?
No. There is no fee for submitting your beneficial ownership information report to FinCEN.
How will I report my company’s beneficial ownership information?
If you are required to report your company’s beneficial ownership information to FinCEN, you will do so electronically through a secure filing system available via FinCEN’s BOI E-Filing website (https://boiefiling.fincen.gov).
Are some companies exempt from the reporting requirement?
Yes, 23 types of entities are exempt from the beneficial ownership information reporting requirements. These entities include publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies.
Who is a beneficial owner of a reporting company?
A beneficial owner is an individual who either directly or indirectly: (1) exercises substantial control (see Question D.2) over the reporting company, or (2) owns or controls at least 25% of the reporting company’s ownership interests (see Question D.4).
What is substantial control?
An individual can exercise substantial control over a reporting company in four different ways. If the individual falls into any of the categories below, the individual is exercising substantial control:
The individual is a senior officer (the company’s president, chief financial officer, general counsel, chief executive office, chief operating officer, or any other officer who performs a similar function).
The individual has authority to appoint or remove certain officers or a majority of directors (or similar body) of the reporting company.
The individual is an important decision-maker for the reporting company. See Question D.3 for more information.
The individual has any other form of substantial control over the reporting company as explained further in FinCEN’s Small Entity Compliance Guide (see Chapter 2.1, “What is substantial control?”).
Resources:
https://www.fincen.gov/boi-faqs#A_1
https://home.treasury.gov/news/press-releases/jy2015