Beneficial Ownership Information (BOI)
New Federal Reporting Requirement for Beneficial Ownership Information (BOI)
Effective January 1, 2024, many companies in the United States must report information about their beneficial owners—the individuals who ultimately own or control the company—to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.Beneficial ownership information reporting is not an annual requirement. A report must only be submitted once unless a company needs to update or correct information. Review FinCEN’s Small Entity Compliance Guide, which provides information to help small businesses comply with this reporting requirement.
Penalties for Failing to File
Failure to file this report will result in a penalty of $591/day, with a maximum penalty of up to 2 years in prison and $10,000.Who Has to Report?
Companies required to report are called reporting companies. Reporting companies may have to obtain information from their beneficial owners and report it to FinCEN. Your company may need to report information about its beneficial owners 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.
- A foreign company and was registered to do business in any U.S. state or Indian tribe by such a filing.
Who Does Not Have to Report?
Twenty-three types of entities, including publicly traded companies, nonprofits, and certain large operating companies, are exempt from beneficial ownership information reporting requirements. FinCEN’s Small Entity Compliance Guide contains checklists for the 23 exemptions that may help determine whether your company qualifies for an exemption. Please review Chapter 1.2 of the Guide for more information.
When Do I Report?
FinCEN began accepting reports on January 1, 2024.- If your company was created or registered before January 1, 2024, you will have until January 1, 2025, to report BOI.
- If your company is created or registered in 2024, you must report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.
- If your company is created or registered on or after January 1, 2025, you must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
- Any updates or corrections to beneficial ownership information you filed with FinCEN must be submitted within 30 days.