Beneficial Ownership Information Report

Beneficial Ownership Information Report is a new requirement from the Financial Crimes Enforcement Network (FinCEN) that business owners must provide personal identifiable information to the federal government. This report was created under the Corporate Transparency Act (CTA). The purpose of its creation was to prevent anonymous shell companies and to deter money laundering and other financial crimes. In this article, we will go over what you need to know about the Beneficial Ownership Information Report.

Who Has to Report

Both domestic and foreign companies have reporting requirements. Domestic reporting companies are corporations, LLCs, or similar entities that were created by filing with your state. Foreign reporting companies are corporations, LLCs, or similar entities that were created under the laws of a foreign country but are registered to do business in a U.S. state. There are exemptions to the filing requirements. Businesses that do not have to file include certain types of banks, credit unions, investment companies, insurance companies, and regulated public utilities.

Who Are Beneficial Owners

Beneficial owners in the qualifying business must report their information through the BOI report. What is a beneficial owner? It is someone who either directly or indirectly exercises control of the business or owner or controls more than 25% of the business.

What the Report Includes

The Beneficial Ownership Information Report contains very basic information about the owners. This includes the business name along with any tradenames or DBAs. Additionally, you need to provide the current street address, the formation jurisdiction of the business, and Employer Identification Number (EIN). For the owner you will need to provide their date of birth, address, and unique identifying number like driver’s license or passport number. You will also need to unload an image of the document.

When Do You Have to File

When you need to file your BOI report will depend on the creation place of your business. If you created your business before January 1, 2024, you will need to file your report by January 1, 2025. However, if you create your business after January 1, 2024, you have to file your BOI report within 90 days of receiving approval from your state. If you fail to file in time, there is a $500 a day penalty that can rack up to the maximum of $10,000.

How to Submit Your Report

You can submit your Beneficial Ownership Information Report on FinCENs website. This electronic submission is free and will not be available until January 1, 2024.

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