If you’ve never heard of the new federal Beneficial Ownership Information (BOI) reporting, you’re not alone. An estimated 32 million small businesses will need to report before January 1, 2025!
This is currently an evolving situation!
There are still many court cases making their way through the system, as well as discussions happening amongst legislators.
As of December 4, 2024, a federal injunction has halted the new BOI requirement.
Various resources recommend that small business owners who have not yet filed, take no immediate action, but remain vigilant.
FinCEN may appeal the ruling, and if successful, it would mean that millions of small business owners would need to act quickly to complete their filing. We are closely monitoring the news and will continue to keep you updated as new guidance and recommendations become available.
Note that this article does not constitute legal advice. If you have any questions or concerns about whether or not to file at this time, please consult your legal counsel.
We’ve summarized the most current need-to-know information. For more in-depth info, please see the official Compliance Guide.
Before beginning your report, please see the 12/4/24 update above.
Choose from two submission options: Online or PDF
Step-by-step instructions with screenshots for Online Form
Step-by-step instructions for using the PDF Form
(Prior to the 12/4/24 injunction) The deadline for submitting your Beneficial Ownership Information (BOI) report to FinCEN is January 1, 2025. For businesses with simple structures and a small mangement team, this may be an easy report to complete. Businesses with more complex ownership and management structures will want to get started right away. This is a one-time filing, however going forward, you will need to submit an update should your business experience any ownership or management changes (see section below).
What is BOI and what’s the purpose?
BOI stands for Beneficial Ownership Information. A “beneficial owner” is defined as a person who exercises significant control over a business. This includes the actual shareholders/owners, directors or members of the board, and C-Suite level executives.
So where did this come from? In 2020, Congress passed the Anti-Money Laundering Act, establishing the Corporate Transparency Act (CTA), and requiring the US Treasury Department’s Financial Crimes Enforcement Network “FinCEN” to implement new reporting measures for small businesses. The CTA and BOI are intended to combat money laundering, tax and PPP (Paycheck Protection Program) fraud, and other illegal activities.
In essence, FinCEN aims to increase transparency of business ownership and expose shell companies engaged in financial fraud.
Who needs to report?
Most small corporations and LLCs with:
- • 20 or less US-based employees
- • Less than $5 million annual gross receipts from sales in the US
Who is exempt?
- Sole proprietors
- Large businesses defined by meeting all criteria below:
- • More than 20 US-based employees
- • $5 million+ gross receipts annually from sales within the US
- Certain types of businesses in banking, investments, securities, insurance, accounting firms, public utilities. See page 11 of the guide.
When do I need to report?
- • Deadline for currently operating small businesses: January 1, 2025
- • Businesses launched in 2024 must file within 90 days of their incorporation date.
- • Businesses launched in 2025 or later must file within 30 days of their incorporation date.
So what info do I need to submit?
- Your company info:
- • Full legal business name
- • DBA (if you have another official name you are “doing business as”)
- • US headquarters address
- • IRS TIN and/or EIN
- • State of incorporation
- Information on your owners/directors:
- • Their full legal name
- • Birthdate
- • Current residential address
- • Passport, driver’s license or similar gov’t photo ID
Who counts as a beneficial owner or director?
- Any owner(s) holding at least 25%:
- • Depending on your company structure, this could be anyone who holds 25% or more of voting rights, equity, stock, capital interest, or similar, including investors.
- • Ownership held in a trust must report the trustee(s), beneficiaries, and grantor(s).
- • If ownership is held by a parent/holding company, you must report the owners and directors of the parent company (the goal here is to find out the actual people at the end of the hierarchy)
AND
- Any individual who exercises significant authority or control over the business, whether or not they hold any ownership percentage:
- • C-suite officers- President, CEO, COO, CFO, Controller, General Counsel, etc.
- • If you have a Board, all members and/or directors, even if they are not actively employed in daily operations
- • Any senior manager who exercises important decision making surrounding the company’s finances, strategic direction, staff organization, entry into major contracts, or similar. (it’s a VERY broad definition).
How often do I have to do this?
There’s no annual renewal, rather, if ANYTHING changes, an updated report must be submitted within 30 days. This includes any ownership percentage changes, new DBAs, and/or change of key personnel.
Remembering to submit these updates regularly can be a big burden on small business owners. We recommend grouping this checkpoint into another regularly scheduled activity, such as preparing quarterly reports.
This is an ongoing, permanent requirement for small businesses.
Who do I contact for help?
- Send a question online via: https://fincen.gov/contact
- OR Leave a voice message on the FinCEN Regulatory Helpline (1-800-767-2825 toll free or 703-905-3591)
Do not send your message through both the contact form and the phone helpline, as this will slow down your response time.
You can also utilize the Virtual Assistant Chat
More help resources:
- Frequently Asked Questions
- More in depth info about which businesses are exempt
- More in depth info about who counts as a “beneficial” owner or manager
- Full compliance guide
All questions must be sent directly to FinCEN. WBEC-East does not provide BOI reporting consulting or individual assistance.
What if I don’t do it?
Penalties can include civil fines up to $10,000 and a criminal sentence up to 2 years in prison.
Is there a cost to file?
No, there is no fee to file or report future changes.
This article was last updated on 12/5/2024. The summary above represents the most recent information made publicly available, and should not be construed as legal advice.