As of January 1, 2024, the Financial Crimes Enforcement Network (“FinCEN”) is now accepting Beneficial Ownership Information Reports. Under the Corporate Transparency Act, certain domestic and foreign companies are now required to report beneficial ownership information (“BOI”) to FinCEN. This information identifies the individuals who directly or indirectly control an entity.
Reporting Companies include corporations, LLCs, and foreign entities registered to do business in the United States. There are 23 types of entities that are exempt from reporting BOI, such as large corporations and tax-exempt entities. FinCEN released a Small Entity Compliance Guide to help companies identify if they are Reporting Companies. Companies that are not exempt from reporting must submit BOI reports for all non-exempt entities.
Beneficial ownership information includes the name, date of birth, and street address of each beneficial owner. Also, in order to identify any beneficial owners, the beneficial owner must provide either a U.S. Passport number, state driver’s license number, or other governmental number from a document. If these numbers are unavailable, FinCEN may provide an identifying number to the beneficial owner. That number may be used instead of the governmental identifier. Reporting Companies can file their BOI reports online at https://boiefiling.fincen.gov/.
There are three different deadlines for filing BOI reports, depending on when the Reporting Company was created:
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Reporting Companies established prior to January 1, 2024 have until January 1, 2025 to file BOI reports.
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Reporting Companies established in 2024 have 90 days from the date of establishment to file BOI reports.
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Reporting Companies established in 2025 or later have 30 days from the date of establishment to file BOI reports.
It is important to file BOI reports timely. While Reporting Companies may avoid penalties by correcting false information within 90 days of the original BOI report deadline, willful failure to file or filing false BOI reports could result in civil and criminal penalties. Penalties may be up to $500 each day that the information is past due and can include imprisonment for up to two years for criminal violations.
FinCEN released an FAQ addressing many questions Reporting Companies might have, such as who can access BOI reports, who is a beneficial owner, and how to update BOI reports. We expect more guidance from FinCEN in the coming weeks and months to clarify this enormous compliance initiative.
For any questions, please contact Andrew Vazquez at andrew@asburylawfirm.com. Authored by Andrew Vazquez.
