Beginning January 1, 2024, small businesses and other entities across the U.S. must comply with new Beneficial Ownership Information (BOI) filing requirements mandated by the Corporate Transparency Act. These regulations, overseen by FinCEN (the Financial Crimes Enforcement Network), are designed to enhance transparency and combat illicit activities such as money laundering and tax evasion.

Here’s a breakdown of what businesses need to know:

Applicability

The BOI filing requirements apply to domestic and foreign companies registered to do business in the United States. While some entities, including tax-exempt organizations, banks, and large operating companies, are exempt from filing, the regulations significantly impact small businesses.

Required Information

Reporting companies must submit detailed information about their beneficial owners, including:

• Full name
• Date of birth
• Residential address
• A unique identifying number from a government-issued ID (e.g., passport or driver’s license)

A “beneficial owner” is defined as any individual who owns at least 25% of a company or exercises substantial control, such as senior officers.

For companies formed or registered after 2023, additional information about the “company applicant” (the individual who filed the formation document) must also be provided.

Deadlines

The reporting deadlines vary based on when a company was established:

• Existing Companies (formed before 2024): Reports are due by January 1, 2025.
• Companies Formed in 2024: Reports must be submitted within 90 days of creation.
• Companies Formed After 2024: Reports are due within 30 days of creation.
• Updates to Existing Information: Any changes to beneficial ownership or company details must be reported within 30 days.

Filing Process

The responsibility for filing the BOI report lies solely with the business entity. Reports must be filed electronically through FinCEN’s e-filing portal at boiefiling.fincen.gov. Businesses can choose between two submission methods:

1. Completing and submitting a web-based form online
2. Uploading a completed PDF version of the BOI report

The individual submitting the report will need to provide their name and email address. Importantly, there is no fee for filing through FinCEN.

For those seeking additional assistance, third-party services like CorpNet offer a low-cost, user-friendly filing solution for BOI reporting.

Penalties for Non-Compliance

Failing to file or update BOI reports can result in severe consequences, including daily fines of up to $10,000 and potential imprisonment.

Resources for Compliance

FinCEN has developed a range of resources to help small businesses navigate the filing process, including a compliance guide and FAQs. These materials provide step-by-step instructions and answers to common questions, ensuring businesses can meet their obligations without unnecessary challenges.

By adhering to these requirements, businesses can avoid penalties and contribute to greater financial transparency.