BOIR - Beneficial Ownership Information Report
WHAT IS THE NEW FEDERAL REQUIREMENT FOR COMPANIES IN 2024? BOIR
Congress enacted the bipartisan Corporate Transparency Act to curb illicit finance. This law requires many companies doing business in the United States to report information about who ultimately owns or controls them.
Effective January 1, 2024, many companies in the United States must report information about their beneficial owners (BOIR – Beneficial Ownership Information Report) —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. 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.
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. Most small businesses will have to report.
Your company may need to report information about its beneficial owners if it is:
- Domestic reporting companies: corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States.
- Foreign reporting companies: entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States.
WHO DOES NOT HAVE TO REPORT
While most small businesses must report their beneficial owner information, there are a few businesses that do not need to file.
Twenty-three types of entities are exempt from beneficial ownership information reporting requirements, including publicly traded companies, nonprofits, and certain large operating companies. See Small Entity Compliance Guide
Businesses and services that don’t have to file a report include:
- Financial brokers and dealers
- Money transferring or transmitting service companies.
- Certain banks and bank holding companies.
- Large companies with more than $5,000,000 in gross sales that have a physical operating office in the US and more than 20 full-time employees.
WHY DO COMPANIES HAVE TO REPORT BOI TO THE U.S DEPARTMENT OF THE TREASURY?
In 2021, Congress passed the Corporate Transparency Act on a bipartisan basis. This law creates a new beneficial ownership information reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.
WHEN DO I REPORT
FinCEN began accepting reports on January 1, 2024.
EXISTING COMPANIES
If your company was created or registered prior to January 1, 2024, you will have until January 1, 2025 to report BOI.
COMPANIES CREATED IN 2024
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.
WHO IS A BENEFICIAL OWNER OF A COMPANY?
A beneficial owner is an individual who either directly or indirectly: (1) exercises substantial control over the reporting company, or (2) owns orcontrols at least 25% of the reporting company’s ownership interests.
A reporting company can one or have multiple beneficial owners.
WHAT HAPPENS IF A REPORTING COMPANY DOES NOT FILE THE BOIR?
A person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. That person may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.
What is substantial control?
An individual can exercise substantial control over a reporting company in four different ways. If the individual falls into any of the categories below, the individual is exercising substantial control:
The individual is a senior officer (the company’s president, chief financial officer, general counsel, chief executive office, chief operating officer, or any other officer who performs a similar function).
The individual has authority to appoint or remove certain officers or a majority of directors (or similar body) of the reporting company.
The individual is an important decision-maker for the reporting company.
The individual has any other form of substantial control over the reporting company as explained further in FinCEN’s Small Entity Compliance Guide.
HOW WE WILL HELP YOU
FILE THE BOIR?
Your Request to comply with the BOIR will be done by ITC – International Trading Center LLC, with many years of experience is managing and filing corporate information to government entities.
With ITC support you can:
- Submit BOIR
- Ensure compliance
- Individualized contact
- Avoid costly penalties (up to $500 per day)
- Compliance with automatic reminders
REQUEST YOUR BOIR SERVICE NOW!
$70 – One beneficial owner
$120 – More than one beneficial owner
