In recent years, regulations around corporate transparency have become stricter, and small business owners need to be aware of new requirements. One key area of focus is Beneficial Ownership Information (BOI).
What is Beneficial Ownership Information?
Beneficial ownership information refers to the identifying details of individuals who directly or indirectly own or control a company. This information is crucial for transparency and accountability.
Why Do Companies Have to Report Beneficial Ownership Information?
In 2021, the U.S. Congress passed the Corporate Transparency Act (CTA) to combat the hiding of illicit activities through anonymous corporate structures. This law requires companies to report their beneficial ownership information to the U.S. Department of the Treasury. The goal is to make it harder for bad actors to misuse shell companies or other opaque ownership structures.
Who Can Access Beneficial Ownership Information?
The Financial Crimes Enforcement Network (FinCEN) manages the beneficial ownership information. Access is granted to Federal, State, local, and Tribal officials, as well as certain foreign officials under specific circumstances. Financial institutions can also access this information with the consent of the reporting company to ensure compliance and security.
Detailed Reporting Process:
Should My Company Report Beneficial Ownership Information Now?
- FinCEN’s BOI E-Filing website launched on January 1, 2024.
- Companies created or registered before January 1, 2024, have until January 1, 2025, to file their initial BOI report.
- Companies created or registered in 2024 have 90 calendar days after notice of the company’s creation or registration to file.
- For companies created or registered on or after January 1, 2025, the filing deadline is 30 calendar days after notice of creation or registration.
How to Report BOI to FinCEN?
- The reporting must be done electronically via FinCEN’s BOI E-Filing website.
- There is no fee for submitting the BOI report.
- While most companies can handle this themselves using FinCEN’s guidance, professional help from an attorney or CPA is also an option.
Filing a BOI Report:
- Anyone authorized by the company, such as an employee, owner, or third-party service provider, can file a BOI report.
- Filers must provide basic contact information, including name and email address or phone number.