A new regulation came into effect on January 1st, 2024. Many businesses, including Limited Liability Companies (LLCs) and Corporations, must file a beneficial ownership information (BOI) report with FinCEN.
You’ve probably heard about it but you’re not sure what it is and what you need to do. Below, we take a look at everything you need to know about BOI and how it affects your business.
What is FinCEN?
FinCEN stands for Financial Crime Enforcement and it is a bureau of the U.S. Department of Treasury. FinCEN introduced the BOI requirement in September 2022 to enhance financial transparency and prevent financial crimes like money laundering.
What is BOI?
The BOI report collects details about the beneficial owners who directly own or control a company.
The BOI report aims to stop individuals from exploiting shell companies or questionable ownership structures for illegal gains. It provides the U.S. government with important information to maintain national security and keep financial systems safe from criminals involved in drug trafficking, fraud, money laundering, and other illicit activities.
Filing a BOI report
What to include in a BOI report
Legal company name
Any DBAs or trade names
Jurisdiction of formation
Tax ID (EIN, SSN, or ITIN)
Beneficial ownership information:
Date of birth
Submitting a BOI report to FinCEN costs $0.
What types of businesses must file a BOI report?
A BOI report is mandatory for businesses meeting FinCEN’s definition of a “reporting company”.
Companies fall into two categories: domestic or foreign. Domestic ones are entities created through state or tribal registration, while foreign ones are formed under foreign country laws but register to do business in the U.S.
LLCs, C Corporations (including S Corporations), and other entities filing registration documents may be considered reporting companies (e.g., Limited Partnerships, Limited Liability Partnerships, Limited Liability Limited Partnerships, and business trusts).
Keeping your business compliant is a pain. If you have any questions or concerns, grab a free consultation with one of our doola experts.
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