The Financial Crimes Enforcement Network’s (FinCEN) new rule on Beneficial Ownership Information (BOI) has now taken effect as of January 1, 2024. This rule requires corporations, LLCs, or similar entities with 20 or fewer employees and $5 million or less in gross receipts or sales, as reflected in the previous year’s federal tax return, to report their beneficial ownership information to FinCEN.
Who is a Beneficial Owner?
FinCEN defines a beneficial owner as any individual who directly, or indirectly, exercises “substantial control” over a reporting company, or owns at least 25 percent of the “ownership interests” of a reporting company. FinCEN outlines what substantial control and ownership interests mean in their BOI Small Entity Compliance Guide.
Where do I file?
FinCEN has developed an E-Filing System on its website that can be found here.
You will have to file the following information on behalf of your business:
- Full legal name or any DBA name it conducts business under,
- Address,
- Jurisdiction of formation, and
- Taxpayer Identification Number.
You will also be required to file four pieces of personal information about each beneficial owner:
- Name,
- Birthdate,
- Address, and
- An identifying number from a driver’s license, state ID, or passport, and an image of the document that the number is from
Reporting Timeline
Businesses will have one year (until January 1, 2025) to file if the business was formed before January 1, 2024.
- Any business created during 2024 will have 90 days to report.
- Businesses formed after January 1, 2025, will have 30 days to report.
Businesses that have a change in BOI will have 30 days to file updated reports. Additionally, businesses that must correct errors after the initial filing, are required to file a corrected report within the 30 days of the date it knew, or should have known, that the information was inaccurate.
Failure to report could result in criminal penalties of up to 2 years in prison and civil penalties of $500 per day, up to $10,000.
BOIR FAQs
You can find a list of Beneficial Ownership Information FAQs on FinCEN’s website here.
NFIB Resources to Help with Filing
NFIB will be holding a webinar on BOI reporting on January, 17, 2024 and you can register here.
In the meantime, NFIB has created a BOI fact sheet containing up to date and pertinent information concerning the rule.
If you have any additional questions on BOI, you can email [email protected].
