Starting January 1, 2024, most companies created in or registered to do business in the U.S. are required to report information on their Beneficial Owners to the Financial Crimes Enforcement Network (FinCEN) under the Corporate Transparency Act (CTA).
The rule identifies domestic and foreign as the two types of reporting companies that must file a report.
A domestic reporting company is a Corporation, Limited Liability Company (LLC), or any entity created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe.
A foreign reporting company is a Corporation, LLC, or other entity formed under the law of a foreign country that is registered to do business in any state or tribal jurisdiction by the filing of a document with a secretary of state or any similar office. Under the rule, and in keeping with the CTA, twenty-three types of entities are exempt from the definition of “reporting company.”
FinCEN expects that these definitions will also include Limited Liability Partnerships, Limited Liability Limited Partnerships, Business Trusts, and most limited Partnerships, because such entities are generally created by a filing with a secretary of state or similar office.
What
- A BOI (Beneficial Ownership Information) Report is a document that identifies the individuals who directly or indirectly own, control, or benefit from a company. This report helps ensure transparency and compliance with federal regulations, aiming to prevent financial crimes like money laundering and tax evasion.
- Members, or owners, of a limited liability company (LLC) are likely the beneficial owners under the new BOI rule. This makes LLCs as reporting companies that need to file a new report with the federal agency and provide basic contact information about the company and its owners. This requirement applies to single-member and multi-member LLCs, all of which are considered reporting companies, and therefore also would need to identify beneficial ownership information in the BOIR.
Who
The BOI report must be filed by certain entities known as “reporting companies.” These include:
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Corporations: Formed under the laws of a U.S. state or Indian tribe. (C or S Corp)
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Limited Liability Companies (LLCs): Formed under the laws of a U.S. state or Indian tribe.
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Other Similar Entities: Such as limited liability partnerships, business trusts, and other entities created by filing a document with a secretary of state or similar office.
When
- FinCEN began accepting BOI reports on January 1, 2024
- New businesses that are formed on or after January 1, 2024, must file within 90 days of business formation
- Existing businesses that were formed before January 1, 2024, must file before January 1, 2025
- New businesses that are formed on or after January 1, 2025, must file within 30 days of business formation
Documentation
The following documentation is needed in order to proceed
- Driver's License or State ID
- Proof of EIN Number (IRS document)
Cost
- $149
- $75 for any additional entities you own.