Financial Crimes Enforcement Network (FinCEN) recently hosted an information session outlining the Beneficial Ownership Information (BOI) reporting rule under the Corporate Transparency Act (CTA). This rule is designed to prevent the use of anonymous shell companies for illicit activities such as money laundering and terrorist financing by requiring certain companies to disclose their ownership information. If you missed the session, here’s a brief summary of what you need to know about BOI reporting to ensure your company remains compliant.
What is BOI Reporting?
The BOI reporting rule requires certain companies operating in the U.S. to disclose the identities of individuals who own or control the business. This initiative aims to increase transparency and reduce financial crime. The registry will help prevent illegal activities that exploit the anonymity of business ownership.
Why is This Important?
Compliance is crucial—failure to meet the reporting requirements could lead to serious civil and criminal penalties. Fortunately, FinCEN provides resources—including a compliance guide, FAQs, and an easy-to-use online filing system—to make the process smoother for businesses.
Key Details:
- Who Must File? Companies created or registered in the U.S. after 2024, and some created before, are required to report.
- Beneficial Owner Definition: Individuals owning 25% or more of a company or those with significant control, like senior officers.
- What’s Needed? Information such as legal names, addresses, tax ID numbers, and government-issued photo IDs for both the company and its beneficial owners.
- Deadlines: Existing companies must file by January 1, 2025, while new companies have 90 days after creation to comply.
- Penalties for Non-Compliance: Willfully ignoring these requirements can lead to both civil and criminal charges.
FinCEN’s online portal makes filing simple, and updates can be made within 30 days if any information changes.
Next Steps:
- Download our key takeaways document for more details on BOI reporting requirements
- Visit fincen.gov/boi for more details.
- Determine if your company needs to file.
- Gather the required information about your company and its beneficial owners.
- Submit your report before the deadline to avoid penalties.
For specific legal advice, consult a qualified professional to understand how BOI rules apply to your business.
