Beneficial Ownership Information (BOI)

In 2021, Congress enacted the Corporate Transparency Act (CTA) to provide beneficial ownership information (BOI) to the U.S. Treasury Financial Crimes Enforcement Network (FinCEN). This is part of the U.S. government’s efforts to counteract money laundering and other such illegal activities and identify shell companies.

Companies are required to report BOI information when they meet the definition of a “reporting company” and do not qualify for an exemption.

A domestic reporting company would generally include a corporation (S Corp or C Corp), limited liability company (LLC), and companies created by filing documents with a secretary of state, such as a limited liability partnership, business trust, and other limited partnerships. The term “foreign reporting company” generally includes entities formed under the law of a foreign country and registered to do business in any U.S. state.

Beneficial owners are broadly defined and involve owners who directly or indirectly own at least 25% of the entity’s ownership interests or exercise substantial control over the reporting company (even if they don’t have an ownership interest). While this may seem to only impact a few significant owners, it can encompass many senior officers of the business as well as those individuals who are involved in any significant business decisions (e.g., board members)

• Full legal name
• License, passport, or other government ID
• Date of birth
• Address

• Reporting companies created or registered to do business in the U.S. on or after January 1, 2024, must file an initial report disclosing the identities and information regarding their beneficial owners within 90 days of creation or registration.
• Reporting companies created or registered to do business in the U.S. prior to January 1, 2024, are required to file an initial report by January 1, 2025.
• Reporting companies created or registered to do business in the U.S. on or after January 1, 2025, must file an initial report disclosing the identities and information regarding their beneficial owners within 30 days of creation or registration.
• Once the initial report is filed, an updated BOI report must be filed within 30 days of a change in their beneficial ownership.

• A person who willfully violates the BOI reporting requirement is subject to a civil penalty of up to $500 per day.
• Additionally, there is the potential for a criminal penalty of up to $10,000 and up to two years of imprisonment.
• These penalties can be assessed to both the filer of the BOI report and anyone who willfully provides the filer with false information.

Should any of the reported information change or a beneficial ownership interest be sold or transferred, the entity must report this information within 30 days of the change or face the potential of having the penalties described above imposed. Changes include reporting a beneficial owner’s change of address or name, a new passport number when a passport is replaced or renewed or providing a copy of a renewed driver’s license.

Siegelaub Rosenberg PA specialize in BOI reporting and is fully prepared to assist you with accurate and timely filing. Contact our office for more information.