Beneficial Ownership Information Reporting (BOI)
The Financial Crimes Enforcement Network (FinCEN) of the United States Department of the Treasury has begun receiving reports of beneficial ownership. The bipartisan Corporate Transparency Act, which was passed in 2021 to combat illegal money, mandates many firms doing business in the United States to reveal information about the individuals who ultimately own or manage them.
“The launch of the United States’ beneficial ownership registry marks a historic step forward in protecting our economic and national security,” stated Secretary of the Treasury Janet L. Yellen. “Corporate anonymity allows for money laundering, drug trafficking, terrorism, and corruption. It affects American citizens and disadvantages law-abiding small companies. A centralized database of beneficial ownership information would eliminate fundamental vulnerabilities in our financial system and help us to combat the epidemic of illicit funding made possible by opaque business structures.”
Filing is easy, secure, and free of charge. Companies who are obligated to comply (“reporting companies”) must submit their initial reports by the following deadlines:
Existing companies: Companies that were established or registered to do business in the United States before January 1, 2024 must file by January 1, 2025.
Newly formed or registered companies: Reporting firms established or registered to do business in the United States in 2024 have 90 calendar days to file after getting real or public notification that their company’s formation or registration is effective.
The reporting of beneficial ownership information is not required on a yearly basis. A report should only be submitted once, unless the filer wishes to update or correct information. Typically, reporting businesses must submit four pieces of information about each beneficial owner:
Please include your name, date of birth, address, and identifying number from a valid U.S. driver’s license, passport, or identification document issued by a state, local government, or Indian tribe. If none of these documents are available, a non-expired foreign passport can be used. An image of the document must also be provided.
The company must also provide basic information about itself, such as its name(s) and address. Furthermore, reporting firms formed on or after January 1, 2024 are expected to provide information about the individuals who founded the company (“company applicants”).
FinCEN is dedicated to providing America’s small companies with the resources and information they require to file as quickly and easily as possible. FinCEN’s Small Entity Compliance Guide helps small enterprises through the requirements in simple terms. Filers can also visit www.fincen.gov/boi to watch instructional films and webinars, get answers to frequently asked questions, interact with the contact center, and learn more about reporting.
To learn more, download this summary.
To learn more about Holmes & Company and how we can help you with BOI, contact our Managing Partner, Charles Holmes here.