Business Owners: Are you aware of the new Beneficial Ownership Reporting (BOI) requirements that are coming into effect? If not, don’t worry! We’re here to break it down for you in simple terms.
What is Beneficial Ownership Reporting?
The Beneficial Ownership Reporting is part of the Corporate Transparency Act (CTA), designed to enhance transparency in business ownership and control. This initiative aims to prevent money laundering and other financial crimes by requiring businesses to disclose who truly owns or controls them.
Who Needs to Report?
Mainly, there are two types of companies that must comply with these new reporting requirements:
Domestic Reporting Companies
This includes corporations and limited liability companies (LLCs) that are created in the U.S.
Foreign Reporting Companies
These are entities formed under foreign laws but registered to do business in the U.S.
What are the penalties for not filing?
If you are required to file an initial BOI report or an amended report and do not file within the required timeline, you may be subject to civil or criminal penalties.
Civil penalties of up to $591 per day for willful violation
Criminal penalties of up to 2 years in prison and a fine up to $10,000
What Information Must Be Reported?
If your company falls under the reporting requirements, you’ll need to provide specific information about your business and its beneficial owners. This includes:
Company Details
Name
DBA or other alternate names
Principal business address
Jurisdiction of formation
Taxpayer identification number.
Beneficial Owner Information for each owner
Owner name
Birthdate
Address
Unique identifying number from an acceptable ID (like a driver’s license or passport)
Image of that ID showing the number from the previous step
Who is Considered a Beneficial Owner?
A beneficial owner is anyone who directly or indirectly:
Exercises substantial control over the company, or
Owns or controls at least 25% of the ownership interests.
Are There Exemptions?
Yes! There are 23 types of entities that are exempt from these reporting requirements, including larger operating companies with significant revenue and employee counts. However, most small businesses will need to comply with the new rules.
Important Dates to Remember
The reporting timeline starts on January 1, 2024. Here’s what you need to know:
Companies created before this date must file their initial reports by January 1, 2025.
New companies formed after January 1, 2024, must report within 90 days of their creation.
Any changes to reported information must be updated within 30 days.
How to Report
Reporting will be done electronically through FinCEN’s website, and there’s no fee to submit your reports. It’s essential to ensure that your information is accurate, as penalties for non-compliance can be steep.
Need Help?
Navigating these new reporting requirements can feel overwhelming, but you don’t have to do it alone. At Kent County Tax Pros, we’re here to assist you with understanding and fulfilling your BOI reporting obligations.
If you have questions or need help filing your reports, don’t hesitate to reach out! Contact us today for personalized assistance and peace of mind. Together, we can make sure you’re on the right track with your business compliance.
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