Very short summary of the Beneficial Ownership Information reporting requirement under the Corporate Transparency Act.
Starting in 2024, corporations, limited liability companies (LLCs), limited partnerships, and other entities must file a report with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) providing specified information regarding the entity’s “beneficial owners.”
Entities formed in 2024 will have 90 days from the entity’s formation/registration to file these reports. Entities formed after 2024 must file the report within 30 days of the entity’s formation/registration. Entities in existence prior to January 1, 2024, have until January 1, 2025, to file these reports.
If 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. 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.
This is part of the federal government’s anti-money laundering and anti-tax evasion efforts and is an attempt to look beyond shell companies that are set up to hide money. Unfortunately, this will impose burdensome reporting requirements on most businesses, and the willful failure to report information and timely update any changed information can result in significant fines of up to $500 per day, or if criminal charges are brought, fines of up to $10,000 and/or two years imprisonment. These penalties can be imposed against the beneficial owner, the entity, and/or the person completing the report
What is a FinCEN Identifier
Something You Really Should Consider if you are a beneficial owner of multiple reporting companies.
In lieu of providing your personal information when completing the Reporting Company’s BOI you may want to choose to use a FinCEN Identifier. You may apply for FinCEN Identifier on a separate website from the BOI Report website. To apply you must provide the same information as you need to supply for the BOI Report.
If you need to supply the same information then why should I consider using it? There are two reason I think a FinCEN Identifier should be used.
- It provides just a little more privacy should (and by should, I mean when) the BOI data base is hacked.
- If you are a beneficial owner of multiple reporting companies and your personal information needs to be updated then you will only need to update your information once instead of for each reporting company.
To apply for a FinCEN Identifier have a digital copy of your identification ready and go to the following website and click on the Sign in or Create an Account box. https://fincenid.fincen.gov/landing
To File A BOI Report go to the following website and click on the “File BOIR” box. https://boiefiling.fincen.gov/
MORE DETAILS