Do You Need to Report Beneficial Ownership Information? Find Out if Your Company is Affected!

Beneficial Ownership Information (BOI) Reporting Explained

Beneficial Ownership Information (BOI) reporting is a new requirement under the Corporate Transparency Act (CTA) of 2021. This law aims to help the US government tackle serious crimes like money laundering and tax evasion. The BOI report details who owns or controls businesses in the US. This move is designed to promote fair business practices.

What Needs to be Reported?

Businesses required to report must include the following:

• Legal name
• Trade names or “doing business as” names
• Employer Identification Number (EIN) or Taxpayer Identification Number (TIN)
• Complete legal address
• Type of BOI filing

For each beneficial owner, the information must include:

• Full legal name
• Date of birth
• Full legal address
• Identification (like a passport or driver’s license)

A beneficial owner is anyone who owns at least 25% of the company or has significant control over it, such as a corporate officer or major shareholder.

Where to File and Deadlines

To file the BOI report, go to the Financial Crimes Enforcement Network (FinCEN) website. All companies registered before January 1, 2024, must submit their reports by that date. Companies formed between January 1, 2024, and January 1, 2025, must report within 90 days of forming. New companies registered after January 1, 2025, have a 30-day deadline.

Who Is Exempt?

Some businesses are not required to report. The following 23 types are exempt:

• Securities reporting issuers
• Governmental authorities
• Banks and credit unions
• Investment companies and advisors
• Accounting firms
• Large operating companies (with at least 20 employees, over $5 million in revenue, and a physical office)
• Inactive entities and certain subsidiaries

Consequences of Not Filing

If someone fails to file the BOI report, they could face penalties. These include $500 per day for civil violations and criminal penalties, such as a $10,000 fine or up to two years in prison.

Because reporting can be complicated, the Treasury Department allows entities to make corrections within 90 days of the initial deadline.

For more information, businesses and beneficial owners should visit the FinCEN website to stay informed about compliance.

About the Author: David A. Lopez, CPA, is the managing member of David A. Lopez & Co., LLC.