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  • Writer's pictureBrian R. Schobel, CPA

Ready for 2024? The Essential Guide to BOI Compliance

Starting January 1, 2024, a significant shift in corporate transparency will take effect in the United States. The Corporate Transparency Act (CTA) mandates the reporting of Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN). This move aims to curb illicit activities like tax evasion and money laundering. Here's what you need to know:

Who Needs to Report?

  1. Reporting Entities: The rule applies to both domestic and foreign companies registered to do business in the U.S. This includes corporations, LLCs, and similar entities.

  2. Exemptions: Certain entities like public companies, regulated entities (banks, insurance companies), and those in private equity and venture capital are exempt.

Who is a Beneficial Owner?

A beneficial owner is someone who:

  • Directly or indirectly exercises substantial control over the company.

  • Owns or controls at least 25% of the company's ownership interests.

Required Information

Companies must report:

  • Company Details: Legal name, address, jurisdiction of formation, and taxpayer identification number.

  • Beneficial Owner Details: Legal name, birthdate, address, and a unique identifying number from an identification document.

Deadlines and Compliance

  • New Entities: Those formed after January 1, 2024, must file within 90 days of formation.

  • Existing Entities: Entities formed before this date have until January 1, 2025, to comply.

  • Updates: Changes in beneficial ownership must be reported within 30 days.

Costs and Penalties

  • Cost: The estimated cost for compliance is about $85 for entities with simple structures.

  • Penalties: Non-compliance can lead to hefty fines and potential criminal charges.

Final Thoughts

The new BOI reporting requirements mark a pivotal step towards greater corporate transparency in the U.S. While they primarily target larger corporations and foreign entities, all businesses should be aware of these changes. With substantial penalties for non-compliance, it’s crucial to understand your obligations under the CTA.

For more detailed information, you can visit the FinCEN website or consult with BRS CPA. Stay informed and prepared to ensure your business complies with these new regulations.

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