Understanding the New BOI Reporting Requirements in the U.S. (2024)
As of January 1, 2024, the Corporate Transparency Act (most corporations, limited liability companies (LLCs), requires most corporations, limited liability companies (LLCs), and similar entities to file Beneficial Ownership Information (BOI) reports to the Financial Crimes Enforcement Network (FinCEN). This law aims to enhance transparency and combat financial crimes like money laundering and tax evasion.
Key BOI Reporting Requirements:
Who Must Report:
Domestic and foreign entities registered to do business in the U.S.
Exceptions include certain nonprofits and regulated financial entities. You can learn about the exceptions here.
What Information Must Be Reported:
For the company: Legal name, trade names, business address, jurisdiction of formation, and tax identification number.
For each beneficial owner:
Full name, birthdate, and residential address.
A unique identifier from an unexpired government ID (e.g., passport or driver’s license) along with a copy of the ID.
For companies formed after January 1, 2024, information on the “company applicant” (the person responsible for filing the formation documents) is also required.
Filing Deadlines:
Companies formed before January 1, 2024, must file by January 1, 2025.
Companies formed on or after January 1, 2024, have 30 days after formation to file their BOI.
Updates and Corrections:
Entities must report changes to BOI (e.g., ownership changes) within 30 days.
Corrections to errors must be made within 30 days of discovery.
Compliance and Penalties:
Failure to comply with BOI reporting requirements can result in significant penalties:
Civil fines: $500 per day of non-compliance.
Criminal penalties: Up to $10,000 in fines and/or two years in prison for intentional violations.
How to File:
BOI reports are submitted electronically through the FinCEN BOI E-Filing System.
Why It Matters:
BOI reporting ensures greater transparency in business operations, helping law enforcement track illicit activities. Businesses must understand their obligations to avoid penalties and ensure compliance in mergers, acquisitions, or financing scenarios.
For more details, visit FinCEN’s official BOI filing page.
Questions? Schedule a consultation with Ariella Law.
The information on this website is for informational purposes only, and does not constitute legal advice.
