New Federal Reporting Requirement for Who Does Not Have to Report? Beneficial Ownership Information (BOI)

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Effective January 1, 2024, many companies in the United States must report information about their beneficial owners—the individuals who ultimately own or control the company—to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.

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Beneficial ownership information reporting is not an annual requirement. Unless a company needs to update or correct information, a report only needs to be submitted once. 

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Who Has to Report?

Companies required to report are called reporting companies. Reporting companies may have to obtain information from their beneficial owners and report that information to FinCEN.   

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Your company may need to report information about its beneficial owners if it is:

1. a corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or

 

2.  a foreign company and was registered to do business in any U.S. state or Indian tribe by such a filing.

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Who Does Not Have to Report?

Twenty-three types of entities are exempt from beneficial ownership information reporting requirements, including publicly traded companies, nonprofits, and certain large operating companies. 

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When Do I Report?

FinCEN began accepting reports on January 1, 2024.

• If your company was created or registered prior to January 1, 2024, you will have until January 1, 2025 to report BOI.

• If your company is created or registered in 2024, you must report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.

• If your company is created or registered on or after January 1, 2025, you must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.

• Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 days.

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Civil Penalty.

As of January 25, 2024, the civil penalty for each day a violation continues is $591. The Corporate Transparency Act (CTA), which went into effect in 2021, requires companies to file reports that identify their beneficial owners. Companies that don't report or provide false information can also face criminal penalties of up to $250,000 or five years in prison, or both.