What is a Beneficial Ownership Information Report and do *I* need to file one??
Elle Woods may be comfortable using legal jargon in everyday life, but let's be real: it's easy to glaze over when you're reading notices from the Department of Treasury.
So: what the heck is a Beneficial Ownership Information (BOI) Report?
👉 A Beneficial Ownership Report (or “BIO Report” for short) lets FinCEN know who ultimately benefits from owning a company.
What the heck is #FinCEN?
👉 FinCEN stands for "Financial Crimes Enforcement Network." It's a bureau of the U.S. Department of the Treasury that exists to "safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities."
Do *I* have to file a BOI Report for my small business?
👉 The short answer? Probably. Per FinCEN, "corporations (“Inc.”), limited liability companies (LLCs), and any other entities created by the filing of a document with a secretary of state or any similar office in the United States" are required to file.
But why am I required to file a Beneficial Ownership Information Report?
👉 Because the Corporate Transparency Act, which was enacted in 2021, went into effect last month (Jan 2024). According to CO—by the U.S. Chamber of Commerce, this Act was written to "combat illicit activity including tax fraud, money laundering, and financing for terrorism by capturing more ownership information for specific U.S. businesses.” FinCEN states that by requiring businesses to file a BOI Report, “bad actors” will have a harder time hiding or benefiting from “their ill-gotten gains through shell companies or other opaque ownership structures."
When do I have to file my BOI report?
👉 If your company is required to submit a BOI report, your deadline to file will depend on when your company was established:
1️⃣ Companies established BEFORE January 1, 2024: If your business was created/registered to do business BEFORE January 1, 2024, you have until January 1, 2025, to file your BOI report.
2️⃣ Companies established DURING 2024: If your business is created/registered to do business DURING 2024, you have NINETY CALENDAR DAYS after receiving notice of the company’s creation or registration to file.
3️⃣ Companies established AFTER 2024: If your business is created/registered to do business in 2025 OR LATER, you have THIRTY CALENDAR DAYS from the day you receive notice of the company's creation or registration.
Where can I find more resources on Beneficial Ownership Information reporting requirements?
The Good news? We’ve done some of this legwork for you already.
- FinCEN addresses many FAQs here: https://www.fincen.gov/boi-faqs
- You can learn more about what the Financial Crimes Enforcement Network does here: https://www.fincen.gov/what-we-do
- Here is the article we referenced by CO—by the U.S. Chamber of Commerce: https://www.uschamber.com/co/start/strategy/small-business-corporate-transparency-act
- The Boutique Lawyer, a woman-owned company that drafts legal contract templates for a variety of small business types, has a free (and helpful) eBook on BOI that you can download here: https://shop.theboutiquelawyer.com/products/the-small-business-owner-s-roadmap-to-corporate-transparency-act-reporting
We hope the information in this blog post was helpful to you! Keep in mind that the content in this article is not legal advice, and we strongly recommend you communicate with a CPA or lawyer for further clarification. This is a new requirement, and failing to comply with it correctly can be expensive. This post is simply an introduction to the topic of Beneficial Ownership Information reports, and does not cover every aspect of this reporting requirement, nor will it necessarily be updated if requirements change.
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