Understanding the New Beneficial Ownership Information Filing Requirement

In an effort to enhance transparency and combat financial crimes, a new filing requirement for Beneficial Ownership Information (BOI) has been introduced under the Corporate Transparency Act (CTA). Beginning January 1, 2024, many businesses will need to file information about their beneficial owners with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). However, this requirement hasn’t been widely publicized, and many companies may not be aware of it.

Why is BOI Filing Important, and Who Needs to Know?

The primary goal of BOI filing is to prevent illegal activities, such as money laundering, fraud, and tax evasion, by making ownership information more accessible to authorities. This transparency measure aims to strengthen financial integrity and accountability. However, because this requirement has received limited attention, companies who need to file risk missing their deadlines if they aren’t aware of the rules.

Who is Required to File?

Most corporations, LLCs, and similar entities created or registered in the U.S. will be required to file this information. There are some exemptions, such as for banks, insurance companies, and nonprofits, but the majority of small and mid-sized companies will need to comply. For new entities, the BOI filing is due within 30 days of formation. Existing entities, however, have until December 31, 2024, to file, which provides some time for those who may not yet be aware of the requirement.

What Information Must Be Reported?

BOI filing involves submitting details such as the beneficial owner’s full legal name, date of birth, current address, and an identifying number (like a driver’s license or passport number). Staying on top of these new requirements and updating information as changes occur will be essential to avoid penalties. You can learn more about this topic at the Financial Crimes Enforcement Network website - https://fincen.gov/boi

PS: Watch out. There are other websites that will look similar and want to charge you a fee for doing this for you. It is our understanding that you should not have to pay a fee if you use the government website link.