Understanding the Requirements
The Beneficial Ownership Information (BOI) reporting requirements are a new regulation for many businesses in the United States. Established by the Corporate Transparency Act passed on January 1, 2021, this law aims to increase transparency around company ownership and combat financial crimes. While the law itself passed in 2021, the deadlines for filing the initial BOI reports are staggered depending on when your business was formed.
Who Needs to File?
Not all businesses are required to file a BOI report. The focus is on reporting companies, which include:
- Domestic LLCs and corporations
- Foreign companies registered to do business in the US
There’s a grace period depending on when your business was formed:
- Existing Businesses (Before January 1, 2024): These companies have until January 1, 2025, to file their initial report.
- New Businesses (Formed in 2024): You have 90 days from receiving notice that your business is officially formed to file.
- Businesses Formed After January 1, 2025: The deadline tightens to 30 days after receiving formation notice.
What Information Needs to be Reported?
The BOI report focuses on identifying beneficial owners of your company. These are individuals who own or control 25% or more of the company’s shares or voting rights. For each beneficial owner, you’ll need to report:
- Full Name
- Date of Birth
- Address
- A valid ID number (driver’s license, passport, etc.)
How to File
The BOI report is filed electronically through FinCEN’s BOI E-Filing website: BOI E-Filing website. It’s free to file, and there are currently no annual reporting requirements. Updates are only necessary if ownership information changes.
You May have Heard
Yes, there has been some legal fight surrounding the BOI Requirement. Here’s a breakdown of the situation:
- A federal court challenge: In March 2024, a federal district court issued a ruling against the Corporate Transparency Act (CTA), which established BOI reporting. However, this ruling is narrow and applies only to a specific organization involved in the lawsuit.
- Appeal and Ongoing Implementation: The U.S. Department of Treasury appealed the court decision. As of July 2024, the legal battle is ongoing.
- Current Status: Despite the ongoing litigation, FinCEN, the agency responsible for BOI reporting, is still implementing the CTA. This means most businesses are still required to comply with the filing deadlines.
Need More Help? The BOI reporting requirements can seem complex, but resources are available to help you navigate the process. FinCEN’s website offers a FAQ section and other guidance documents: FinCEN BOI Information or check out the learning center on my site for more articles: BeepatCPA.
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