Starting January 1, 2024, many legal entities will have to report beneficial ownership information (BOI) to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) through an electronic filing system at www.fincen.gov/boi.

This new reporting requirement is intended to combat money laundering, the financing of terrorism and other illegal activity.

What entities are required to file BOI Reports?
The Reporting Rule requires that entities organized in the U.S. and outside the U.S. file the BOI Reports with FinCEN.  Domestic entities including corporations, limited liability companies and any other entity created by the filing of a document with a secretary of state under any state law.

Are there any exemptions?
There are 23 categories of exemptions for types of entities not required to Report including publicly traded companies, banks, public accounting firms, and tax-exempt entities.  In addition, certain “large operating entities” are exempt from filing which include those entities: (a) that employ more than 20 people in the U.S., (b) have reported gross revenue of over $5M on the prior year’s tax return, and (c) are physically present in the U.S.

THEREFORE, MOST DOMESTIC CORPORATIONS AND LLC’s ARE REQUIRED TO REPORT.

What information must be reported?
1. Information about the entity must be reported including its name, business address, state of formation, and IRS Taxpayer Identification Number (EIN).

2. Information about the beneficial owners must be reported. A “beneficial owner” any individual who, directly or indirectly either:
•exercises “substantial control” over the reporting company, or
•owns or controls at least 25% of the ownership interests in the reporting company

3. Information about the company applicants must be reported IF the company was created on or after January 1, 2024.  All company applicants must be individuals.  A company applicant is the individual who directly filed the Report.  A possible second company applicant is the individual who was primarily responsible for directing or controlling the filing of the first Report.

When must companies file?
There are different filing deadlines depending on when an entity was created.

  • New entities created in 2024— must file within 90 days after creation
  • New entities created after 12/31/2024—must file within 30 days after creation
  • Existing entities created before 1/1/2024—must file before 1/1/2025
  • Changes to previous filed Reports must be filed within 30 days after change.

Penalties for non-compliance
Penalties for willfully not complying with the BOI Reporting Requirements can result in criminal and civil penalties of $500 per day and up to $10,000 with up to two years of jail time.

For information and a consultation, call the attorneys of Supinka & Supinka PC
724- 349-6768