The new year will usher in a new reporting requirement for millions of companies. In 2021, the Corporate Transparency Act (CTA) created the Beneficial Ownership Information (BOI) Reporting Rule in an effort to discourage, identify, and investigate financial crimes.
Effective January 1, 2024, any foreign or domestic “reporting company” will be required to provide specified information on the business and its beneficial owners to the Financial Crimes Enforcement Network (FinCEN). A reporting company is broadly defined as any corporation, limited liability company (LLC), or similar entity that is created or registered to do business in the United States. A list of the 23 entities that are exempt from the BOI reporting requirement can be found on the FinCEN BOI Reporting FAQ website.
A beneficial owner is an individual who directly or indirectly:
- exercises substantial control over the reporting company, or
- owns or controls at least 25% of the reporting company’s ownership interests.
The required information for both the reporting company and beneficial owner(s) is as follows:
- Legal name
- Trade, “doing business as” (d/b/a), or “trading as” (t/a) name(s)
- Current street address of principal place of business for domestic company or current street address from which a foreign company conducts business in the United States
- Jurisdiction of formation or registration
- U.S. taxpayer identification number or a tax identification number issued by a foreign jurisdiction and the name of the jurisdiction
- Whether it is an initial report or an update to a prior report
- Date of birth
- Residential address
- An identifying number from an acceptable identification document, such as an active passport or U.S. driver’s license, and the name of the issuing state or jurisdiction of identification document
Reporting deadlines are dependent on when a company is created or registered, and when updates are made to required reporting information:
- Companies created or registered before January 1, 2024: January 1, 2025
- Companies created or registered on or after January 1, 2024: 30 calendar days after registration date
- Updates to required reporting information: 30 calendar days after the update. If there is an error discovered, the amended report also has a 30 calendar-day deadline.
FinCEN will not be accepting reports until January 1, 2024. It is currently working on a secure online system for filing BOI reports. Price Kong will send an update once this site is live. You can learn more about BOI reporting HERE.
If you have questions regarding BOI reporting, please contact our office at 602.776.6300.