LGA would like to share pivotal updates concerning the Beneficial Ownership Information (BOI) reporting. With the introduction of the Corporate Transparency Act (CTA), business transparency is undergoing significant transformation. Effective January 1, 2024, the BOI reporting requirement will commence. This directive mandates certain small businesses to submit their beneficial ownership details to the Financial Crimes Enforcement Network (FinCEN) as part of a broader anti-money laundering initiative.
Delving into BOI: Essentials to Know
What Exactly is BOI?
BOI provides information about the individuals who hold significant control over a business. It encompasses data such as the individual’s name, date of birth, address, and government-issued identification.
Who’s Subject to BOI?
Both domestic and foreign entities registered or set up to operate within the U.S. are mandated to report their BOI to FinCEN. Yet, notable exceptions like publicly traded companies, banks, and credit unions have been exempted.
BOI Reporting Timelines:
For businesses established before December 31, 2023, the reporting deadline is January 1, 2025. Entities created post-January 2024 or those experiencing ownership transitions during the year have a concise 30-day window from the formation date for submission.
Compliance: The Stakes Are High
Deliberate non-compliance comes with hefty fines, scaling up to $10,000, and potential incarceration for up to two years.
On the Horizon: Potential Changes
- Both the AICPA and State Accounting Societies have called for delays in enacting BOI reporting.
- FinCEN has proposed extending the filing deadline for certain BOI reports. For entities created or registered between January 1, 2024, and before January 1, 2025, the deadline would be extended from 30 days to 90 days. This extension aims to provide these entities with ample time to comprehend the new reporting obligations and ensure accurate reporting.
- The proposed extension to 90 days is applicable to both domestic and foreign entities created or registered in the U.S. within the first year after the Reporting Rule comes into effect. However, for entities created or registered on or after January 1, 2025, the 30-day deadline as mentioned in the Reporting Rule remains in place.
More Information on BOI: Small Entity Compliance Guide
FinCEN published a Small Entity Compliance Guide (click the link to access) to assist the small business community in complying with BOI reporting.
LGA is closely monitoring BOI reporting developments. We encourage you to contact your LGA advisor and attorney with compliance questions, especially when establishing a new entity or experiencing ownership transitions. We are here to guide and support you, ensuring you stay connected and informed.