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By David Inabinett, Attorney at Law

There is a new federal reporting requirement that impacts businesses, effective 1/1/2024. The Beneficial Ownership Information (BOI) Reporting requirement is part of the Corporate Transparency Act passed in 2021. The goal of the legislation is to “make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.” The new laws will be enforced by FinCEN, the Financial Crimes Enforcement Network under the US Department of Justice.

Who must file BOI reports?

Many corporations and limited liability companies (LLCs) will be required to file BOI reports. Essentially, if your organization was created by filing with the Secretary of State or similar entity in your state, you may be required to file a report. This includes some foreign reporting companies registered to do business in the United States. Note that each organization under a parent company must file its own BOI report, if not exempt.

There are 23 entities that are exempt from this filing requirement, including publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies. A list of exemptions can be found here.

When do I have to file a BOI report?

Organizations that were in existence before 1/1/2024 must file their first BOI report no later than 1/1/2025. Organizations created after 1/1/2024 and before 1/1/2025 must submit their initial BOI report within 90 calendar days after receiving notice that its creation or registration is effective. After 1/1/2025, newly created organizations have 30 calendar days to file their first report. NOTE: FinCEN will not accept any reports prior to 1/1/2024.

Any changes to ownership must be reported within 30 calendar days of the actual change.

Who is a Beneficial Owner?

FinCEN defines a beneficial owner is a person who has “substantial control” over the organization OR who has at least a 25% interest in the company.  FinCEN’s definition includes senior officers and important decision makers, even if they do not have a C-level title. We recommend reviewing the definition of beneficial owner provided by FinCEN before you file.

What information is included?

The form requires information on the company, including legal name, EIN, etc., as well as the full names, home addresses, dates of birth, and a copies of an approved government issued ID (passport, driver’s license) for each beneficial owner.

How do I file a BOI report?

The form will be available after 1/1/2024 on the BOI website at https://www.fincen.gov/boi.

Is there a cost to file a BOI report?

At this time, there is no cost to file your report.

Brinkley Walser Stoners’ business law attorneys are here to help if you have questions about this new law or other legal questions related to your business. Contact us today to schedule an appointment.