Beginning on January 1, 2024, many companies (Reporting Companies) in the United States will have to report information about their beneficial owners, i.e., the individuals who ultimately own or control the company. They will have to report the information to the Financial Crimes Enforcement Network (FinCEN). FinCEN is a bureau of the U.S. Department of the Treasury.

 

Reporting Companies:

Entity that has obligation to report information about their beneficial owners are:

  1. A corporation, a limited liability company(LLC),or is otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe ; or
  2. A foreign company and was registered to do business in any U.S. state or Indian tribe by such a filing.

Exempt Entities:

Twenty-three types of entities are exempt from the beneficial ownership information reporting requirements. These entities include publicly traded companies, nonprofits, and certain large operating companies.

Beneficial Owner:

A beneficial owner is any individual who, directly or indirectly:

  • Exercises substantial control over a reporting company; • OR 
  • Owns or controls at least 25% of the ownership interests of a reporting company.

 

Submission of Report:

Report on beneficial ownership information will be accepted by FinCEN starting on January 1, 2024.

  • If the company was created or registered prior to January 1, 2024, it will have
    until January 1, 2025, to report BOI.
  • If the company was created or registered on or after January 1, 2024, and before
    January 1, 2025,  it report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.
  • If the company was created or registered on or after January 1, 2025, it must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
  • Any updates or corrections to beneficial ownership information that was previously filed with FinCEN must be submitted within 30 days.

Penal Provisions:

The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in a civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000.