Overview
Beneficial Ownership Information (BOI) reporting is a requirement that requires companies to disclose information about their owners and controllers to the Financial Crimes Enforcement Network (FinCEN). The purpose of BOI reporting is to make it harder for criminals to hide behind opaque ownership structures and to benefit from illicit activities such as money laundering, tax fraud, and human trafficking. In 2021, Congress passed the Corporate Transparency Act (CTA) on a bipartisan basis. The CTA 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.
· 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.
· Beginning in 2025, newly created or registered companies will have 30 days.
Who needs to file?
A company may need to report beneficial ownership information to FinCEN if it is:
· a corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
· a foreign company that was registered to do business in any U.S. state or Indian tribe by such a filing.
For more information about whether a company needs to file, visit fincen.gov/boi.
How to file?
BOI reports must be filed electronically. FinCEN’s e-filing portal, available at https://boiefiling.fincen.gov/, provides two methods to submit a report: (1) by filling out a web-based version of the form and submitting it online, or (2) by uploading a completed PDF version of the BOI report. Some third-party service providers may also offer the ability to file the BOI report through their software. The person who submits the BOI report will need to provide their name and email address to FinCEN. There is no fee for filing the report.
How can we help?
Because BOI reporting falls outside the normal course of services our firm provides, and could be considered an unauthorized practice of law, we are not preparing or filing these reports for clients. If you prefer not to file the report on your own behalf, we encourage and suggest that you contact either an attorney or a third-party service to report for you as soon as possible.
If you have questions about these new reporting rules and how they affect your business, we would be happy to discuss them with you and provide you with recommendations for legal counsel or third-party provider assistance. FinCEN also has a Small Entity Compliance Guide and frequently asked questions to help guide businesses through the reporting requirements. These are available at https://www.fincen.gov/boi/small-business-resources.
What happens if a reporting company doesn’t file?
A person who willfully violates beneficial ownership reporting requirements may be subject to civil penalties of up to $591 for each day that the violation continues, as well as criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.
As a valued client of Hottel & Willis, P.C., it is important for your organization to comply with this reporting obligation.
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