Beneficial Ownership Information Reporting

I hope you are doing well. Ahead of the new year, I am reaching out with a reminder about a new FinCEN reporting requirement that has a deadline of January 1, 2025, for most companies.

Under the Corporate Transparency Act (CTA), companies are required to share critical information about their beneficial owners. This reporting is done by filing a beneficial ownership information (BOI) report, which discloses specific ownership details.

What is a BOI report?

BOI reports share contact details about your company, like its legal name and employer identification number. Companies must also disclose key information about their beneficial owners, such as their name, address, and identification number from a driver's license or passport.

Who files a BOI report?

BOI reporting applies to domestic companies created by filing a document with the Secretary of State or a similar office. Notably, domestic companies may include corporations or LLCs. Certain entities created in foreign countries and registered to do business in the United States are also required to file a BOI report; these entities are referred to as “foreign reporting companies.”

Companies that are subject to outside regulation may be exempt from BOI reporting. Exempt entities may include tax-exempt organizations, financial service firms, publicly traded companies, accounting firms, and other large operating companies.

When are BOI reports due?

If your company existed before 2024, you have until January 1, 2025 to file your BOI report. Yet, if you started your business in 2024, you have 90 days from when your company began to file your BOI report.

Do I file a BOI report every year?

There is no annual BOI reporting requirement. Instead, you update your company's BOI online when fundamental information about your beneficial owners changes.

What happens if I don't file a BOI report?

If you fail to file or provide false information on a BOI report, you could be penalized up to $591 per day for individuals, with a cap of $10,000. You could also be subject to additional fines and/or imprisonment for intentional false reporting or willful failure to provide accurate information.

Do I still need to file when BOI reports were ruled unconstitutional?

A recent ruling from the federal court in Alabama found the CTA's reporting requirement unconstitutional. However, the ruling was limited to only plaintiffs included in the lawsuit. You likely have a reporting requirement unless your company was part of the lawsuit or meets an exemption. However, companies that joined the National Small Business Association after March 1, 2024, are not exempt from the reporting requirement.

What information is required?

Company details like legal name, address, and tax ID numberFor each beneficial owner: full name, date of birth, residential address, and identifying number from a government-issued ID (like a driver's license or passport) along with an image of the document.

When to report?

Companies formed or registered after January 1, 2024, typically need to file their initial report within 30 days of receiving notice of their company formation.Existing companies had until January 1, 2025, to file their initial report.Updates to beneficial ownership information must be filed within 30 days of any changes.

Note: This item was contributed by Richard A. Weintraub, Esquire, my friend and a premier attorney with The Weintraub Law Group PC, San Diego, CA 92131, and brought to you by the RJ Fichera Law Firm, where our mission is to provide trusted, professional legal services and strategic advice to assist our clients in their personal and business matters. Our firm is committed to delivering efficient and cost-effective legal services focusing on communication, responsiveness, and attention to detail. For more information about our services, contact us today!

Content in this material is for general information only and is not intended to provide specific advice or recommendations for any individual.

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