BOI Reporting Overview: Beneficial Ownership Information (BOI) is the identification of individuals who have direct or indirect ownership or control over a company. As of March 24, 2023, corporations and LLCs are required to disclose BOI to the U.S. Department of the Treasury. This requirement comes under the Corporate Transparency Act, passed in 2021 to thwart the misuse of business entities by malefactors.
Reporting Timeline: Entities formed or registered to conduct business before January 1, 2024, have until January 1, 2025, to submit their initial BOI report to the Financial Crimes Enforcement Network (FinCEN).
Entities Required to Report:
Domestic Reporting Companies: U.S.-based corporations, LLCs, or similar entities established through state-level registration.
Foreign Reporting Companies: Foreign entities, including corporations and LLCs registered to do business in the U.S. through state-level filing.
Exemptions: Several entities are exempt from BOI reporting, including but not limited to publicly traded companies, certain nonprofits, and large operational companies. Notably, there are 23 categories of exemptions:
Securities reporting issuers
Banks, credit unions, and related institutions
Money services businesses, brokers or dealers in securities
Investment companies and advisers, including venture capital fund advisers
Insurance companies and state-licensed insurance producers
Entities registered under the Commodity Exchange Act
Accounting firms and public utilities
Pooled investment vehicles, tax-exempt entities
Large operating companies and their subsidiaries
Inactive entities
Definition of Beneficial Owner: A beneficial owner is someone who either possess substantial control over, or owns at least 25% of, a reporting company's ownership interests.
It is essential for all entities to review whether they fall under this reporting requirement or qualify for an exemption. Should you need further clarification or assistance in complying with the BOI reporting, please don’t hesitate to reach out.