FinCEN Beneficial Owner Information Report (BOIR)

Under the Corporate Transparency Act (CTA) certain taxpayers with a qualified reporting company must file an initial report identifying all Beneficial Owners with substantial control over certain entities. The CTA was passed in 2021 and created a new requirement to report beneficial ownership information (BOI) about the individuals who ultimately own or control a company. Starting January of 2024, this report will be required for many domestic and foreign entities as part of the U.S. government’s efforts to address financial crimes.

What is the Beneficial Ownership Information Report (BOIR)?

The BOIR is a report that identifies the individuals who ultimately own or control your company. This requirement is part of the U.S. government’s efforts to combat financial crimes.

What is the purpose of filing the BOIR?

The BOIR was implemented to close loopholes that allow anonymous entities to be used for illicit activities. By requiring companies to disclose their beneficial owners, the regulation seeks to:

• Increase Transparency: Ensure that law enforcement and regulatory agencies have access to accurate information about the ownership and control of companies.
• Enhance Accountability: Make it harder for individuals to hide their identity behind complex corporate structures.
• Prevent Financial Crimes: Aid in the detection and prevention of money laundering, terrorist financing, and other illegal activities by tracking the true owners of entities.

Who Needs to File?

You need to file a BOIR if your company:

• Is a corporation, LLC, LLP, DBA, or other entity created or registered to do business in the U.S. by filing with a secretary of state
• Has 20 or fewer employees AND $5 Millon or less in annual revenue.
• Does not fall under one of the exemptions listed in FinCEN’s Small Entity Compliance Guide.

Note: Sole proprietorships, trusts, and general partnerships usually are not required to file if they have not registered with the secretary of state and have not been issued a separate EIN.

Who is considered a beneficial owner?

A beneficial owner is an individual who either:

• (1) has significant control over a company, or
• (2) owns or controls at least 25% of the company’s ownership interests. Only individuals can be beneficial owners, not trusts, corporations, or other legal entities. However, in some cases, information about an entity might be reported instead of information about a beneficial owner.

FinCEN’s Small Entity Compliance Guide includes checklists and examples to help identify beneficial owners.

What are the initial filing deadlines?

• Companies created or registered before January 1, 2024: File by January 1, 2025.
• Companies created or registered in 2024: File within 90 days after your company’s registration becomes effective.

How do I file?

Filing must be done electronically through FinCEN’s secure website: FinCEN BOI Filing.

What are the filing requirements?

Entities must provide detailed information about each beneficial owner, including:

• Full legal name
• Date of birth
• Residential or business address
• An identifying number from an acceptable identification document (e.g., passport, driver’s license)
• Attach an acceptable identification document (e.g., passport, driver’s license)

What if I don’t file?

Failure to file the BOIR may result in civil penalties of up to $500 per day for each day the violation continues.

Who will have access to the beneficial owner information submitted?

Federal, State, local, and Tribal officials, as well as some foreign officials, can get beneficial ownership information for national security, intelligence, and law enforcement purposes. Financial institutions can access this information in certain situations if the reporting company agrees.

FinCEN issued rules on December 22, 2023, about who can access this information and how it will be protected. The information will be stored in a secure, non-public database with strong security measures. FinCEN will ensure that those who access the information understand their responsibilities and use it only for approved purposes, keeping it secure and confidential.

Where can I get more information?

You can find more details and the Small Entity Compliance Guide or visit FinCEN’s website at https://www.fincen.gov/boi.

Cooper Norman also has a dedicated team to assist with the Corporate Transparency Act (CTA) and ensure seamless compliance. Our team of experts specializes in navigating the complexities of the CTA and offering personalized support for your business. We stay up-to-date with the latest regulations and provide comprehensive compliance services.

Understanding the importance of accuracy and timeliness, our team employs rigorous processes to ensure all requirements are met. We also offer ongoing support to help your business stay compliant as regulations evolve. Trust our experienced professionals to handle your CTA compliance needs, allowing you to focus on your core business operations with confidence. You can also reach out to info@coopernorman.com for more information.