The deadline for reporting beneficial ownership information (BOI) to FinCEN is approaching. In anticipation of this requirement, BRSW advises those who are required to file to seek the counsel of an attorney. BOI filing penalties are steep for those who willfully fail to comply. Civil penalties are $500 per day and criminal penalties include $10,000 and up to two years imprisonment.
Corporations, limited liability companies, and any other company registered with a secretary of state that was created before January 1, 2024 will need to report their BOI on or before January 1, 2025. Businesses created or registered after January 1, 2024 have 90 days to file initial BOI reports to FinCEN. There is no fee to file BOI reports, and while obtaining a FinCEN identifier is not required to file, it will help the process.
A reporting company must report the company’s legal name and any trade names or doing business as (DBA) names, EIN or IRS tax identification number, the current street address of its US place of business, and similar information for each beneficial owner. 23 types of exemptions from filing can be found here including the most common exemption for large operating companies that employ more than 20 full time employees, have a physical presence in the US, and show over $5 million in gross receipts.
Beneficial owners of a reporting company are those that own or control at least 25% ownership interest as well as any individuals who directly or indirectly exercise substantial control. If an owner is a corporate entity, that corporation will be looked through to determine ultimate ownership percentages. BOI for owners include their name, date of birth, and identification document information, such as a state issued ID or passport. Changes to this information must be reported to FinCEN within 30 days of change.
The BOI reports are filed on the FinCEN website: here.