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New Reporting Requirements of Beneficial Ownership Information

By Jamee Bollinger, CPA

January 4, 2024

Just in time for the new year — another filing requirement for business owners. Starting January 1, 2024, business owners will be responsible for reporting Beneficial Ownership Information (or “BOI”) to the Financial Crimes Enforcement Network (FinCen). This new filing is a part of the Corporate Transparency Act, as passed by Congress in 2021.

We’re here to help you prepare by answering some of the most common questions.

Who Must Report?

Any legal entity that files with a Secretary of State, such as corporations, LLCs, single-member LLCs, etc. Business entities that are excluded from this reporting requirement include:

  • General partnerships, if not required to register with the Secretary of State
  • Large operating companies that meet all 3 of these requirements:
    1. 20 or more full-time employees in the U.S.
    2. Over $5 Million in Gross Revenues
    3. Physical Office in the U.S.
  • Other exceptions may apply based on some regulated industries.

What Gets Reported?

List of “beneficial owners” that have:

  • 25% or more ownership, OR
  • Individuals deemed to have “substantial control” – this includes senior executives and potentially other key positions of control depending on circumstances.

Each beneficial owner needs to report the following information about themselves:

  1. Name / Date of Birth / Current residential physical address
  2. Government-issued ID number, and
  3. A picture of a passport, driver’s license, or other government-issued ID 

When Should Reporting Companies File?

  • Companies in existence prior to January 1, 2024, file your initial report by January 1, 2025 (12-month window).
  • Companies formed on or after January 1, 2024, file your initial report within the first 90 days after formation.
  • Companies formed on or after January 1, 2025, file your initial report within the first 30 days after formation.
  • Updated Filings are required within 30 days of the following events:
    • Changes in ownership or control
    • Becoming aware of a correction needed for a previous report

Where And How Are These Reports Filed?

BOI Reports will be filed electronically through the FinCen website (https://www.fincen.gov/boi).

Why Should You File?

It is important for you to file this BOI Report as outlined above because of the penalties and strict enforcement expected. These include:

  • Civil Penalties of up to $500 per day for “willful violation” or potential criminal fines/imprisonment.
  • Penalties can be avoided by correcting any errors on a filed report within 90 days.

Where Can You Find Additional Resources?

Get in Touch

As your professional advisors, we want to make you aware of this new filing requirement for you and provide helpful resources to help you succeed in these filings. Legal counsel or your business attorney may also have input and advice.

It is important to note that Grimbleby Coleman Accounts & Advisors does not file these reports, but we are happy to help direct you to the resources needed to complete your filings. Contact us for guidance on this article or any of your business tax and accounting needs.