As part of the Corporate Transparency Act (CTA), certain U.S. and foreign entities must now report their Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN). With the recent implementation of the BOI E-Filing System, business owners and decision-makers need to understand these new reporting requirements and how they impact compliance obligations. While this may seem like just another task in an already complex regulatory landscape, it’s essential for maintaining transparency and avoiding penalties.
What Is the Beneficial Ownership Information (BOI) Report?
The BOI Report is a required filing under the CTA that provides information on individuals with substantial control or a significant ownership interest in a company. The report aims to create transparency by identifying these individuals, often referred to as beneficial owners, to prevent illegal activities such as money laundering or the misuse of corporate structures. Entities subject to this requirement must disclose essential information, including names, addresses, dates of birth, and a unique identification number such as a driver’s license or passport number for each beneficial owner.
Who Needs to File a BOI Report?
Entities required to file a BOI report generally include corporations, LLCs, and other similar entities formed in the U.S. or registered to do business here. However, some entities, like sole proprietorships and certain exempt organizations, are not required to file. If your business is structured as a corporation or LLC, you likely need to comply with the BOI filing requirement. It’s important to review your entity type to determine if the rules apply to you.
How to File the BOI Report
Filing your BOI report involves navigating the FinCEN BOI E-Filing System. Entities, including corporations, LLCs, and similar entities, must first determine if they must report. Once confirmed, the report must be filed electronically, ensuring the submission includes accurate and complete details for each beneficial owner. Any changes in ownership or control must be promptly updated in the system to maintain compliance. While this process is straightforward, it requires attention to detail to avoid errors that could lead to penalties.
Important Deadlines & Next Steps
The BOI report must be filed within 30 days of formation for newly formed entities. Existing entities have until January 1, 2025, to submit their initial reports. It’s crucial to meet these deadlines to avoid potential penalties, which can include substantial fines. If you are unsure whether your business falls under these requirements, we encourage you to consult legal counsel, as this filing pertains to Title 31 of the U.S. Code.
While our firm does not provide BOI filing services, we are happy to assist in connecting you with qualified legal professionals who specialize in this area. If you have any questions about your business’s financial standing or other compliance matters, feel free to contact The Hechtman Group. We remain committed to supporting your business through every step of the regulatory process.