BOI Reporting Requirements: Meeting Requirements in 2024!

As of January 1, 2024, the Corporate Transparency Act, mandating the reporting of beneficial ownership information, has been implemented. This legislation requires certain companies, both within the U.S. and abroad, to submit details of their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). It is essential for owners, operators, or those establishing a corporation in the U.S., or foreign entities registered to conduct business in the U.S., to ascertain their obligations under this act to ensure compliance. 

Continue reading to determine the applicability of report BOI to your business, the specific information required for disclosure, and to find answers to frequently asked questions regarding beneficial ownership information (BOI) reporting.

What is a Beneficial Owner?

A beneficial owner is defined as an individual who, directly or indirectly, controls more than 25% of a company’s equity interests. For instance, holding a 30% stake in an LLC qualifies an individual as a beneficial owner, subjecting them to beneficial ownership information reporting requirements.

The definition also encompasses individuals with significant control or influence over the company, including high-ranking officers such as the president, CEO, CFO, general counsel, or anyone with a key role in decision-making.

What is Beneficial Ownership Information? 

Beneficial Ownership Information (BOI) is data about individuals who significantly control a company, either directly or indirectly. It reveals the real people behind a company’s operations, going beyond the legal entities to show who benefits from the company’s activities, regardless of whether their names appear on official ownership documents.

When reported to FinCEN, BOI usually consists of each beneficial owner’s full legal name, date of birth, address (whether residential or business), and a unique identification number, typically from an official identification document.

What is Beneficial Ownership Information Reporting Rule?

The Beneficial Ownership Information Reporting Rule mandates businesses to disclose their owners’ details to FinCEN to enhance transparency and combat financial crimes. It applies to individuals owning 25% or more of a company or having significant control over it, requiring information like names, addresses, and identification numbers. This rule aims to prevent illegal activities by making ownership more transparent.

What Information Do You Need to Report on Beneficial Owners?

To fulfill the requirements of beneficial ownership information reporting, companies must submit detailed information about their beneficial owners to FinCEN using the designated BOI form. This entails providing:

• Full legal name
• Date of birth
• Current residential address
• A unique identifying number from an official document such as a passport or U.S. driver’s license, which must include the name of the issuing state or jurisdiction. An image of this identification document is also required.

For the company itself, the necessary details include:

• The company’s full legal name and any alternate names it operates under (d/b/a or t/a names).
• The company’s current street address and the jurisdiction of its formation.
• The business tax identification number (TIN).

Foreign companies must provide the U.S. address from which they operate and a tax identification number from their home jurisdiction, including the name of the issuing jurisdiction.

When do I need to report my company’s beneficial ownership information to FinCEN? 

The deadline for submitting your company’s Beneficial Ownership Information (BOI) to FinCEN depends on when your company was established or registered.

• If your company was established or registered before January 1, 2024, you need to file the initial BOI report by January 1, 2025.
• For companies established or registered between January 1, 2024, and January 1, 2025, the BOI must be reported within 90 days after being officially recognized or registered.
• Companies established or registered from January 1, 2025, onwards are required to report their BOI within 30 days following their official recognition or registration.

When will FinCEN accept Beneficial Ownership Information reports? 

Starting January 1, 2024, FinCEN is accepting reports of Beneficial Ownership Information (BOI), including updates or corrections to previously submitted BOI reports. 

To prevent penalties, any updates to the BOI should be reported within 30 days of any changes, and corrections to errors or missing information in prior submissions need to be made within 90 days of the original filing deadline.

Conclusion

As of January 1, BOI reporting 2024 requirements have officially taken effect in the United States. It is a significant step towards enhancing transparency in business structures by requiring companies to disclose their beneficial owners. 

It may take some time for businesses to understand and adapt to these regulatory changes. Consult the experts here to determine if or how these changes will affect your business and how you can fully comply with the Beneficial Ownership Information (BOI) reporting requirements. 

Reference links: BOI and Beneficial Ownership Information Reporting Requirement – Manay CPA