Starting January 1, 2024, the Financial Crimes Enforcement Network (FinCEN) began accepting Beneficial Ownership Information (BOI) from reporting companies.
BOI is defined by FinCEN as identifying information about the individuals who directly or indirectly own or control a company.
This new reporting requirement is part of the government’s effort to safeguard the financial system, promote national security, and fight crimes such as money laundering and terrorism by making it difficult for wrongdoers to hide or benefit from their corrupt gains and dirty money using pretend or shell companies.
Read on to know more about FinCEN’s new reporting requirement.
What must be reported in a BOI?
Reporting companies must provide information about its beneficial owners or those individuals who directly or indirectly exercise substantial control over the company or have at least 25% ownership interests in the company.
The information must include the beneficial owners’ name, birthdate, address, and the identifying number and issuer from, and image of, a non-expired U.S. driver’s license, U.S. passport, or other identification document issued by a State, local government, or Indian tribe.
The reporting company must also provide its own information such as its legal and trade name, address, Internal Revenue Service (IRS) Taxpayer Identification Number (TIN), Employer Identification Number (EIN), etc.
Furthermore, reporting companies created in year 2024 and onwards are required to submit information on their company applicants or the individuals who formed their company.
Are all companies required to file?
Not all companies are required to report a BOI. FinCEN has listed 23 exempted entities including publicly traded companies that meets certain requirements, tax exempt non-profits, accounting firms, inactive companies, and certain large operating companies.
However, corporations, limited liability companies, and other entities created or registered to do business in the United States by the filing of a document with a secretary of state or any similar office, that do not fall under the exemptions may be a reporting company.
When to file?
The BOI is not an annual requirement. The reporting company must only submit once and that’s it.
However, reporting companies are required to update information and correct errors in their previously filed BOI reports, if there is any. This must be done within 30 days after a change occurs or after the company becomes aware or has a reason to know of an error.
For filing the initial report, the deadline varies depending on the year the business was created or registered:
| Year the business was created or established | Deadline |
| Before 2024 | Until January 1, 2025 |
| Year 2024 | 90 calendar days after receiving actual or public notice that their company’s creation or registration is effective. |
| Year 2025 and onwards | 30 calendar days after receiving actual or public notice that their company’s creation or registration is effective. |
What if I failed to file, correct, or update within the required timeframe?
You may avoid penalties for filing inaccurate reports if it was corrected within 90 days of the deadline for the original report.
However, the willful violation of the BOI reporting requirements may cost an individual a civil penalty of up to $500 per day until the violation ends. The violator may also be subjected to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Violations may include deliberately failing to file the required BOI, intentionally submitting false information, or unwillingness to correct or update previously filed reports.
How to file?
Filing must be done electronically using the BOI E-FILING System. It is simple, secure, and free of charge. FinCEN expects most companies to be able to file on their own using the resources they provided in their website. However, those who find themselves in need of help may consult the experts at 1099 Accountant for guidance.
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