NEW Business Reporting Requirement

PLEASE READ THE FOLLOWING INFORMATION THAT MAY APPLY TO YOU IF YOU OWN A SOLE PROPRIETORSHIP, LIMITED LIABILITY COMPANY, CORPORATION OR PARTNERSHIP.  REPORTING DEADLINE IS JANUARY 1, 2025.

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.

Filing is simple, secure, and free of charge. Beneficial ownership information reporting is not an annual requirement. Unless a company needs to update or correct information, a report only needs to be submitted once.

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 that information to FinCEN.

  • Your company may need to report information about its beneficial owners if it:
    • Employs less than 20 full-time employees,
    • Reports less than $5 million in gross sales

Who is a Beneficial Owner of a Reporting Company?
A beneficial owner is an individual who either directly or indirectly: (1) exercises substantial control over the reporting company, or (2) owns or
controls at least 25% of the reporting company’s ownership interests.

FinCEN’s Small Entity Compliance Guide provides checklists and examples that may assist in identifying beneficial owners

Who Does Not Have to Report?
Twenty-three types of entities are exempt from beneficial ownership information reporting requirements, including publicly traded companies, nonprofits, and certain large operating companies.

FinCEN’s Small Entity Compliance Guide includes checklists for each of 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.

How Do I Report?
Reporting companies report beneficial ownership information electronically through FinCEN’s website: www.fincen.gov/boi. The system provides a confirmation of receipt once a completed report is filed with FinCEN.

When Do I Report? 

  • If your company was created or registered prior to January 1, 2024, you 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 that you previously filed with FinCEN must be submitted within 30 days.

Penalties for Non-Compliance
A person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. That person may also be subject to 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.

Where Can I Learn More?
You can find guidance materials and additional information by visiting www.fincen.gov/boi, or the BOI FAQ page. 

The law defining these requirements is not part of the tax code and therefore outside the scope of our practice.  We recommend contacting your attorney if you require assistance filing these reports or determining your eligibility.