Beneficial Ownership Information Reporting, mandated by the Corporate Transparency Act starting the 2024 tax year, requires companies to file Beneficial Ownership Information (BOI) Reports with the Financial Crime Enforcement Network (FinCEN). This aims to disclose individuals with significant control over businesses to prevent financial crimes like money laundering through corporate structures. It is estimated that the new requirement will affect upwards of 32.6 million reporting companies in its first year (2024). Here are the basics:
Who needs to file Beneficial Ownership Information Reporting?
Entities Registered in the U.S.: Includes LLCs, LPs, and corporations formed and existing on or after January 1, 2024.
If your entity existed as of January 1, 2024, your initial report must be filed on or before January 1, 2025.
If your entity has been formed in 2024, you have 90 days to file your initial report.
If your entity is formed on or after January 1, 2025, you have 30 days to file your initial report.
Entities Registered after January 1, 2024: Must also identify the Company Applicant, the individual filing the organizational documents.
What are the penalties for non-compliance?
Civil or criminal penalties may result from failing to report or providing false information, including civil penalties of up to $500 for each day the violation continues or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000.
Who is a Beneficial Owner?
If your company is a reporting company, your next step is to identify its beneficial owners. A beneficial owner is any individual who, directly or indirectly:
Exercises substantial control over a reporting company; or
Owns or controls at least 25% of the ownership interests of a reporting company.
What information has to be reported?
For the reporting company: Legal name, trade name, address, jurisdiction, and tax ID.
For each beneficial owner or Company Applicant: Legal name, date of birth, address, and unique ID (e.g., passport or driver's license).
What are my filing options?
Directly via FinCEN's website.
Engage a third party to file on your behalf via a software portal.
What if my information changes?
Updates are required within 30 days of any changes in company or beneficial owner information.
How can Overman Bookkeeping help?
Luckily, Overman Bookkeeping, PC offers services that include determining reporting requirements, identifying beneficial owners, and filing BOI reports via secure software. We are here to assist you through this process every step of the way. Simply visit our website at www.overmanbookkeeping.cpa to reach out to us!
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