A Quick Guide to Beneficial Ownership Information Reporting Requirements
If you are a business owner with a social media account, odds are you have heard rumblings of a new federal government filing requirement called the Beneficial Ownership Information Reporting requirement or BOI for short. BOI refers to identifying information about the individuals who directly or indirectly own or control a company. This law creates a new information reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.
Special From Observer Group Newspapers of Southern California, Inc.
If you are a business owner with a social media account, odds are you have heard rumblings of a new federal government filing requirement called the Beneficial Ownership Information Reporting requirement or BOI for short. BOI refers to identifying information about the individuals who directly or indirectly own or control a company. This law creates a new information reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.
Who is asking for it: FinCEN which stands for Financial Crimes Enforcement Network. This is a division of the United States Government charged with managing financial crimes.
Who is required to file: Companies required to report are called reporting companies. There are two types of reporting companies:
- Domestic reporting companies are corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States.
- Foreign reporting companies are entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office.
You could be exempt from filing if you are one of the following types of entities:
1 Securities reporting issuer
2 Governmental authority
3 Bank
4 Credit union
5 Depository institution holding company
6 Money services business
7 Broker or dealer in securities
8 Securities exchange or clearing agency
9 Other Exchange Act registered entity
10 Investment company or investment adviser
11 Venture capital fund adviser
12 Insurance company
13 State-licensed insurance producer
14 Commodity Exchange Act registered entity
15 Accounting firm
16 Public utility
17 Financial market utility
18 Pooled investment vehicle
19 Tax-exempt entity
20 Entity assisting a tax-exempt entity
21 Large operating company
22 Subsidiary of certain exempt entities
23 Inactive entity
Cost: Its free to file and there is no tax or fees due when filing. But if you file late or miss your window to file you will likely incur late file penalties up to $591 per day. Why are the penalties so high: to encourage compliance.
Where to comply: You can efile for free at https://boiefiling.fincen.gov
When is it due:
- A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial BOI report.
- A reporting company created or registered in 2024 will have 90 calendar days to file after receiving actual or public notice that its creation or registration is effective.
- A reporting company created or registered on or after January 1, 2025, will have 30 calendar days to file after receiving actual or public notice that its creation or registration is effective.
Quick note: if you are a sole proprietor or schedule c filer you are not required to file this form, as you do not register that type of entity with the secretary of state. Find out more at Fincen.gov
