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- September 1, 2024
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Attention Business Owners: BOIR Filing is Now a Must!
The requirement for filing Beneficial Ownership Information Reports (BOIR) was put in place as a result of the Corporate Transparency Act (CTA), which was enacted in 2021 as part of the Anti-Money Laundering Act of 2020. The BOI Report is a filing that discloses information about who ultimately owns or controls a company. It’s part of an effort to prevent illegal activities like money laundering and tax evasion.
The Financial Crimes Enforcement Network (FinCEN), a bureau within the U.S. Treasury Department, is responsible for implementing the CTA’s requirements. They issued the final rule establishing the beneficial ownership information reporting requirements, which took effect on January 1, 2024
By requiring entities to report information about their beneficial owners to FinCEN, the Corporate Transparency Act aims to create a more secure and transparent business environment in the United States, making it significantly more challenging for criminals to exploit the financial system for illegal activities.
Who needs to file?
Most small businesses and companies formed in the U.S. or registered to do business in the U.S. are required to file. This includes:
- Corporations
- Limited Liability Companies (LLCs)
- Partnerships
However, some larger companies and certain types of businesses are exempt.
When to file?
- Existing companies (created before January 1, 2024): Must file by January 1, 2025
- New companies (created in 2024 or later): Must file within 90 days of formation
How to file?
Filing is free and can be done in three ways:
- Online through FinCEN’s BOI E-Filing website
- By filling out a PDF form
- System to System API. This basically means a third party website such as Legal Zoom.
What information is needed?
For the company you are filing BOI report, you will need the EIN and legal name of the company.
For each beneficial owner (individuals who own or control 25% or more of the company), you’ll need to provide:
- Full legal name
- Date of birth
- Current address
- Identification number (from a driver’s license, passport, or other approved document)
- An image of the identification document
You’ll also need to provide basic information about the company itself, such as its legal name and address.
The FinCEN ID is a time-saving feature for individuals who own or control multiple companies that need to file Beneficial Ownership Information (BOI) Reports. When you file your first BOI Report, you can opt to receive a FinCEN ID, which is linked to your personal information. For subsequent filings with other companies, you can simply provide this unique identifier instead of re-entering all your details. This streamlines the process, ensures consistency across filings, and reduces the need to repeatedly submit sensitive personal information. While each company still needs to file its own BOI Report, using a FinCEN ID significantly simplifies the reporting process for individuals involved with multiple entities.
Key points to remember
- Filing is mandatory for most small businesses
- There is no filing fee
- There are significant fines for non-compliance (up to $500 per day)
- You don’t need to hire a lawyer or accountant to file, but you can if you want assistance
- The information is not publicly available and is stored securely by FinCEN
Remember, this is a one-time filing unless your company’s information changes. It’s not an annual requirement
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