The Beneficial Ownership Information (BOI) reporting requirements of the Corporate Transparency Act is likely to apply to most small businesses, yet FinCEN has reported only a fraction of companies that should file have done so.
The Corporate Transparency Act was signed into law on Jan. 1, 2021, expanding anti-money laundering laws and creating new reporting requirements for certain companies doing business in the US. Beginning in 2024, many small businesses are required to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN) in an effort to create a national database for use by national security and law enforcement agencies to prevent the use of shell companies for criminal activity.
Who Must File
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Reporting companies include domestic and foreign corporations (including S corporations), LLCs, and other entities formed through the Secretary of State (SOS).
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There are exemptions for general partnerships, trusts and sole proprietors.
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Large operating companies may be exempt if they have more than 20 full-time U.S. employees, a physical office within the US, and more than $5 million of gross receipts sourced in the U.S.
What information is required?
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Information for all Individual beneficial owners with >= 25 percent ownership or substantial control over the reporting company (i.e. senior officers).
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Reportable information for these beneficial owners includes full legal names, dates of birth, street addresses and unique ID numbers from a non-expired US passport, state driver's license, or other government-issued ID card. An image of the document showing the unique ID number must also be included with the report.
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Company applicants (the person who files the document or registers the reporting company) must provide the same information that is required for beneficial owners.
How and when to file
There is no filing fee. BOI reports must be filed electronically via FinCEN's portal - https://boiefiling.fincen.gov/
The deadline is December 31, 2024 for filing the initial BOI report for companies that were formed or registered prior to January 1, 2024. For companies that were formed or registered after December 31, 2023 and before January 1, 2025, the deadline to file the initial BOI report is 90 days from the date formed or registered. Companies formed or registered after December 31, 2024 must file the initial BOI report within 30 days of its formation or registration. Any changes to the information about a reporting entity or its beneficial ownership going forward is also required to be reported within 30 days of the change. Failure to comply with the new reporting requirements may result in significant civil or criminal penalties.
Has your business completed its required BOI filing yet? If yes, do you have any tips for those who have not yet filed?
Are you using a third-party provider or completing the report on your own?
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Amanda Bernard CMA,CPA,CFE
Director/Manager
Douglassville PA
United States
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