Beneficial Ownership Information Reporting

FinCEN's Beneficial Ownership Information (BOI) reporting requirement is designed to increase transparency around who owns or controls U.S. companies. Here's a breakdown:

Who needs to report: Many companies doing business in the United States are required to report beneficial ownership information. This includes LLCs, corporations, and some other business structures. It is best practice to consult with your legal team to determine whether you are required to file or qualify for an exemption from filing.

What information needs to be reported: Companies must report details about their beneficial owners, which are individuals who ultimately own or control at least 25% of the company or have voting rights. The required information includes:

• Name
• Date of birth
• Address
• Identification number (driver's license, passport, etc.)

When to report: The deadline depends on when your company was created or registered:

• Before January 1, 2024: You have until January 1, 2025, to file your initial report.
• On or after January 1, 2024: You have 90 days after receiving notice of the company's creation or registration to file.

How to report: Reports are filed electronically through FinCEN's website. It's important to note that there is a recent legal challenge to the BOI requirement, and as of March 1, 2024, enforcement against certain plaintiffs has been paused. You can find more details and updates on the FinCEN website https://www.fincen.gov/boi.

Why do companies have to report beneficial ownership information to the Department of Treasury?

Congress passed the Corporate Transparency Act on a bipartisan basis in 2021. This creates new beneficial ownership information reporting requirements as part of the government’s efforts to make it challenging to hide or benefit from illegal gains through shell companies or other ownership structures that are not clarified.

What information is available for companies to learn more about BOI reporting requirements?

FinCEN has provided outreach and education to raise awareness and assist reporting companies understand the new requirements. For more information, please visit the FinCEN website at https://www.fincen.gov/boi.

Are there penalties for failure to comply with the filing requirements?

Failure to comply with these reporting requirements can lead to civil and criminal penalties. For more information, please visit the FinCEN website at https://www.fincen.gov/boi. It is always best practice to consult with your legal team and/or accountant to understand the reporting requirements for your individual needs.

Please note there have been reports of recent fraudulent attempts to solicit information from individuals regarding this new requirement:

According to FinCEN, the fraudulent correspondence may be titled "Important Compliance Notice" and asks the recipient to click on a URL or to scan a QR code. Those e-mails or letters are fraudulent. FinCEN does not send unsolicited requests. If any such request is received, do not respond, click on any links or scan any QR codes within them. Consult with your legal team and/or accountant to understand the reporting requirements for your individual needs.

For Informational/Educational Purposes Only: The content expressed on this site is educational and not intended as specific advice/recommendations/safeguards for any individual. You should carefully consider your needs and consult the appropriate professional(s) for the best solution to meet your needs. Outlooks and past performance are not guarantees of future results.