Beneficial Ownership Information (BOI)
New Requirements to file Beneficial Ownership Information (BOI) Report for Small Businesses and LLCs.
As of January 1, 2024, many small businesses and LLCs must report Beneficial Ownership Information to FinCEN (Financial Crimes Enforcement Network) under the Corporate Transparency Act (CTA) of 2021. It is intended to prevent fraudulent gains through shell companies, money laundering activities, and unclear ownership structures.
What are the requirements?
The requirements to file the report are as follows:
Small businesses and LLCs that have
20 or less full-time employees; and
filed federal income tax return(s) with $5 million or less in gross receipts or sales.
Twenty-three types of entities (https://www.fincen.gov/boi-faqs#C_2) are exempt from filing the report.
What is the Deadline?
Following are the due dates to file the report:
entities registered before January 1, 2024, will have until January 1, 2025, to file the report.
entities registered after January 1, 2024, or before January 1, 2025, will have 90 calendar days to file the report.
entities registered after January 1, 2025, will have 30 calendar days to file the report.
What Information is required to file?
Small businesses or LLCs will require the following:
Legal Name
DBA or any trading names
Employer Identification Number (EIN)
The current principal address of the entity
Beneficial Owners will require:
Name
Date of Birth
Residential Address
Copy of any form of non-expired U.S. government-issued identification (passport, driver’s license or state-issued identification)
A beneficial owner is an individual who owns or controls at least 25% of the reporting entity or exercises substantial control over the reporting entity (for example, directors, decision-makers, senior officers, etc.).
What are the penalties for not filing the report?
Both businesses and individuals will be held liable for willful violations. Violators may be subject to civil penalties of up to $500 for each day that the violation continues or may be subject to criminal penalties of a fine of up to $10,000 and two years imprisonment.