Companies Can Now Begin Filing
The U.S. Beneficial Ownership Information Report (BOIR) Registry is officially open for businesses in 2024 – this new requirement, established by the Corporate Transparency Act (CTA), mandates the disclosure of the true individuals behind legal entities like corporations, LLCs and trusts. After months of anticipation, companies and individuals subject to the rule can now begin filing their reports in an effort to bring more transparency to financial system.
The reporting rule, established by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), seeks to crack down on financial illegal activity by requiring the disclosure of beneficial owners – those who ultimately control or benefit from an entity.
Next Steps for Reporting Companies
Now that the BOIR is open, here’s a breakdown of next steps for reporting companies. You can also read more details about reporting requirements in our December 2023 article, FinCEN’s New Beneficial Ownership Reporting Rule.
- Who needs to report? The CTA applies to a wide range of both domestic and foreign entities, including corporations, limited liability companies (LLCs) and certain trusts. Exemptions exist for certain types of entities, such as publicly traded companies and certain financial institutions.
- What information needs to be reported? Reports must include the name, date of birth, address and an official identifying number and issuer (e.g., U.S. driver’s license, U.S. passport, etc.) of each beneficial owner holding an ownership interest of 25 percent or more, as well as the nature and extent of their control.
- When are reports due? For entities formed after Jan. 1, 2024, reports must be filed within 90 days of public notice that their company’s creation or registration is effective. For existing entities, the deadline is Jan. 1, 2025.
- What are the penalties for non-compliance? Failure to file a report or filing inaccurate information can result in significant civil and criminal penalties, including fines of up to $500 per day and even imprisonment.
Understanding the Form
The BOIR can be completed by visiting the FinCEN’s website and either preparing and submitting the report directly online, or by downloading the available PDF form, which can be prepared offline and submitted when complete. The PDF form does require Adobe Reader 8 or higher to access.
According to the FinCEN’s Beneficial Ownership Information Reporting FAQs, reporting companies are not required to use an attorney or a certified public accountant (CPA) to submit their information to FinCEN; however, the FAQs encourage reporting companies who need assistance to meet their reporting requirements can seek advice from their advisors (i.e., lawyer or accountant). If you are seeking advice on coping with the BOIR requirement or have questions, Windham Brannon’s team of professionals can support your business and its needs. For more information or assistance completing your B OIR, contact your advisor today, or reach out to Gary Gruner, Brandi Samuel or Nicole Suk.
