In recent times, there has been a surge of curiosity and confusion surrounding the new Beneficial Ownership Information (BOI) reporting requirements. Enacted by the Corporate Transparency Act (CTA), these regulations aim to shed light on the ownership structures of businesses, making it more challenging for bad actors to hide behind shell companies. Let’s break down the essentials of this reporting and understand why it matters.

Who Needs to Report? Entities known as reporting companies fall under the BOI requirements. This includes any Corporation, Limited Liability Company (LLC), or similar entities created in the United States by filing with the Secretary of State or an equivalent office. If you’ve filed a business creation document, congratulations, you’re a reporting company.

When and How to Report? The rules took effect on January 1, 2024, and existing entities formed before this date have until December 31, 2024, to complete the filing. Reporting is an annual requirement but is a one-time filing. To report, visit the FinCEN website (fincen.gov/boi) for user-friendly instructions. Contrary to some beliefs, your tax preparer won’t file this for you; it’s your responsibility.  You can also follow our easy 5 step process below.

What Information is Required? When filing, a reporting company needs to provide essential details such as its full legal name, trade or DBA name, business address, jurisdiction of formation, and IRS Taxpayer Identification Number. Additionally, it must disclose information about its beneficial owners.

Who are Beneficial Owners? Beneficial owners, in this context, are individuals who either directly or indirectly control the reporting company or own/control at least 25% of its ownership interest.

Information Required for Beneficial Owners:

•          Full legal name

•          Date of birth

•          Current residential address

•          Unique identifying number (e.g., US passport, state driver’s license)

Why is this Happening? The Corporate Transparency Act was enacted in 2021 to combat illicit activities facilitated by opaque ownership structures. Congress aimed to create a beneficial ownership information report, revealing ownership details and making it harder for individuals to hide behind complex business structures.

What if Ownership Changes? Any changes, such as ownership adjustments, moving, or updating identification documents, must be reported within 30 days to remain compliant.

Filing Made Easier with FinCEN Identifier: Consider obtaining a FinCEN identifier for efficient reporting and enhanced privacy. This identifier can be updated centrally, simplifying the process for individuals with ownership in multiple entities.

Remember, this reporting is not reserved for large corporations; it applies to all reporting companies, including those holding rental properties, Airbnb units, or any entity formed with the state.

Follow our Simple 5 Step Process:

Step 1: Obtain a FinCEN Identifier – Before diving into the reporting process. Visit login.gov/create-an-account/ to apply for this identifier.

Step 2: Gather Essential Information – In addition to your FinCEN Identifier in hand, ensure you have your business’s full legal name, trade or DBA name, current business address (excluding PO boxes), jurisdiction of formation, and IRS Taxpayer Identification Number (EIN).

Step 3: Visit the FinCEN Website – Navigate to the FinCEN website at fincen.gov/boi. The website is user-friendly and offers clear instructions throughout the filing process.

Step 4: Complete the Filing – Follow the prompts on the FinCEN website to complete the filing for your reporting company. This includes entering your business details and the necessary information for each beneficial owner. Remember, this filing is a one-time requirement but may require periodic updates.

Step 5: Update Within 30 Days – Stay vigilant about changes. If there are alterations to ownership, a move, or updates to identification documents (such as an expired driver’s license), ensure you update the information within 30 days. This commitment to timely updates will keep you in compliance.

In conclusion, this new reporting requirement aims to bring transparency to business ownership, discouraging misuse of shell companies. By understanding and promptly fulfilling these obligations, business owners contribute to a more accountable and transparent business landscape. Don’t delay; file your BOI report and embrace compliance with ease.