- FINCEN! a/k/a Financial Crimes Enforcement – Beneficial Ownership Interest BOI
If you are a small business owner with a EIN or State registration, you are probably required to file identifying information about the individuals who directly or indirectly own or control your company with the Financial Crimes Enforcement Network in order to satisfy requirements under the Corporate Transparency Act.
The Beneficial Ownership Information Reporting Rule went into effect Jan. 1, 2024, and it’s important to understand this new law given the severity of criminal and civil penalties for failure to file, which include imprisonment and fines. This is the Corporate Transparency Act (CTA) passed in 2021.
Who is a beneficial owner?
A beneficial owner of a company is any individual who, directly or indirectly, exercises substantial control over a reporting company, or who owns or controls at least 25 percent of the ownership interests of a reporting company.
Why do I need to file?
If not compliance, then, fine of $500 per day for failure to file (Civil penalty – no cap), and for willful failures or intentionally filing inaccurate info up to two years in prison and $10k fine (Criminal penalties).
When do I need to file? Filing timeline
Initial report
- Entities registered before 2024 (before 1/1/24) – You have until 12/31/2024 to file initial report
- Entities registered after 2023 (after 12/31/23) – You have 90 days if created in 2024 (special year – first year) OR You have 30 days if created in 2025 and going forward
Corrected report / Updated report / Newly exempt entity – You have 30 days
Who is required to do this?
Most corporations, limited liability companies (LLCs), and other business entities that do not meet the exemption requirements.
Exemptions – There are 23 exemptions but you probably do not qualify (read the fine print)
Some businesses are exempt from filing—for example, large operating companies with over 20 full time employees and $5 million in income. There are other, more narrow exemptions as well for entities already registered with SEC, FINRA or other authorities.
Items that you need to input (not a comprehensive list)
You need your company’s EIN number, address, and other information from the business.
The BOI report must contain the name, the birth date, the address, and an ID number and image of that ID (i.e. driver’s license or passport) for each “beneficial owner” of the reporting company.
Official guidance on the FINCEN website
Beneficial Ownership FAQ – https://www.fincen.gov/boi-faqs
Small Entity Compliance Guide (English, Spanish, …) – https://www.fincen.gov/boi/small-entity-compliance-guide
Step by step instructions (you can file online or download a fillable pdf)
Online – https://boiefiling.fincen.gov/resources/BOIR_E-File_Online_Step-by-Step_Instructions.pdf
PDF – https://boiefiling.fincen.gov/resources/BOIR_E-File_PDF_Step-by-Step_Instructions.pdf
WHERE TO DO THE ONLINE FILING – Official website to file yourself (no fees )
BOI online filing – https://boiefiling.fincen.gov/boir/html