Stay ahead of the compliance curve! Explore the intricacies of the new FinCEN BOI reporting requirement taking effect from January 1, 2024. Uncover the essentials of the Corporate Transparency Act, understand who needs to report their beneficial ownership information (BOI), and ensure timely compliance. Learn about filing deadlines, exemptions, and the potential consequences for non-compliance. Don’t risk fines or imprisonment – empower yourself with the knowledge to meet these crucial obligations.

Beginning January 1, 2024, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) is implementing a new reporting requirement for businesses. Most businesses will now have to report their beneficial ownership information (BOI) through FinCEN’s electronic filing system. It’s important for business owners to understand their reporting obligation under the act and ensure they comply within the timeframes it sets out.

The Corporate Transparency Act of 2019 established the BOI reporting requirement to address concerns that a lack of transparency in U.S. companies’ BOI impedes law enforcement efforts. The text of the act explains that the Financial Action Task Force on Money Laundering (FATF), the leading international body setting standards for combatting money laundering, has been criticizing U.S. noncompliance with their BOI reporting standards since 2006. The act sets out several objectives:

  • Reducing the vulnerability of the U.S. to wrongdoing by corporations and LLCs with hidden owners
  • Protecting interstate and international commerce from criminals misusing U.S. corporations and LLCs
  • Strengthening law enforcement investigations of suspect companies
  • Setting a clear, universal standard for State incorporation practices
  • Bringing the U.S. into compliance with international anti-money laundering standards

Which businesses must report their BOI?

Unless they qualify for an exemption, all businesses created by filing documents with a Secretary of State or similar office as well as certain foreign entities doing business in the U.S. are required to file a BOI report with FinCEN. The act provides exemptions for many types of entities that are subject to other substantial federal regulations, such as certain businesses providing financial services, publicly traded companies, and other large businesses. A list of exceptions to the reporting rule is posted on FinCen’s beneficial ownership information reporting FAQ page.

When do I have to file BOI reporting for my company?

A company’s BOI filing deadline depends on when the entity was created.

  • Domestic businesses that existed prior to January 1, 2024, and foreign reporting companies registered to do business in the U.S. before that date must complete their filing no later than January 1, 2025.
  • Reporting companies created or registered in 2024 will have 90 days after receiving public notice of the entity’s creation or registration to complete their BOI filing.
  • Reporting companies created or registered in 2025 or later will have 30 days after receiving such public notice to complete the filing.

What happens if my business doesn’t comply with the reporting requirement?

Business owners who ignore the BOI reporting requirement do so at their peril. Willfully failing to file complete or updated BOI for a reporting business can result in both civil and criminal penalties. The act provides for up to $10,000 in fines (calculated at $500 per day the violation continues) and imprisonment for up to two years.

How do I complete BOI reporting for my company?

Fortunately, reporting your business’ BOI is a fairly simple process.

  • Go to FinCEN’s e-filing website: https://boiefiling.fincen.gov/.
  • Click “File BOIR.”
  • Choose how to file your BOI. The system provides three options:
    • File directly online. If you choose this option, you’ll need to complete the process in a single session, as you won’t be able to save your progress and return later.
    • Complete a PDF at your own pace and submit it when complete.
    • File using a system-to-system API interface.

Be sure to have all the information you’ll need before you sit down to file, especially if you’re filing directly online. You will need to report the following:

  • Name of business, including any DBAs
  • Principal place of business
  • Jurisdiction under which the business was formed
  • Tax ID number
  • Full legal names, dates of birth, current address, and ID documents of the company’s beneficial owners

A beneficial owner is defined as an individual who exercises substantial control over the company or owns or controls at least 25% of its ownership interests.

How Can We Help?

We have established a BOI Reporting team that can help facilitate the reporting requirements on behalf of our clients. If you would like to learn more about this service or if we can assist you in any other capacity, call us at +1 (212) 382-3939 or contact us here to set up a time.

Rosenberg Chesnov Advisors, LLC, a Stable Rock Company, has decades of experience working with startups and enterprises across industries. We offer cost-effective solutions with deep expertise in accounting and tax as well as outsourced CFO and back-office services to fuel our clients’ success.

Learn more about us, or explore our blog for more tips and insights.