Understanding Beneficial Ownership Information (BOI) Reporting Requirements
FinCEN Website
The Corporate Transparency Act (CTA), enacted in 2021, introduced Beneficial Ownership Information (BOI) reporting requirements to combat illicit financial activities like money laundering, tax evasion, and fraud. These regulations aim to increase transparency in business ownership structures, ensuring that individuals who ultimately control or benefit from a business are properly identified.
Who Must File BOI Reports?
BOI reporting applies to most corporations, LLCs, and other entities created or registered to do business in the United States. However, there are exceptions, including publicly traded companies, certain large operating companies, and other entities already subject to federal regulatory oversight.
What Information Must Be Reported?
Entities required to file must provide detailed information about their beneficial owners, including:
Full legal name
Date of birth
Residential address
Unique identifying number from a government-issued document (e.g., passport or driver’s license)
Who is Considered a Beneficial Owner?
A beneficial owner is any individual who:
Directly or indirectly owns 25% or more of the ownership interests in the entity
Exercises substantial control over the entity
When and How to File?
Existing entities must file their initial BOI reports by January 1, 2025.
New entities created after January 1, 2024, must file within 30 days of formation.
Reports are submitted electronically through the Financial Crimes Enforcement Network (FinCEN) system.
Penalties for Non-Compliance
Failure to comply with BOI reporting requirements can result in severe penalties, including fines of up to $500 per day and criminal charges carrying potential imprisonment.
Key Takeaways for Business Owners
Stay informed about your entity's BOI reporting obligations.
Gather necessary ownership information well in advance.
Ensure timely and accurate reporting to avoid penalties.
De Leon Tax Services is here to assist businesses in understanding and meeting their BOI reporting requirements. Contact us today for expert guidance and support!
