If your entity was formed prior to January 1, 2024, you have until January 1, 2025 to make your initial beneficial ownership information report. We recommend connecting with an attorney or a corporate compliance service company to assist you with this filing requirement.

Here’s what you should know....

What is BOI Reporting?

As previously discussed in our blog, the Beneficial Ownership Information (BOI) reporting stems from the Corporate Transparency Act of 2021 and is related to Congress’ interest in combating illicit finance. BOI reporting requires many companies doing business in the United States to report information about the individuals who ultimately own or control them.

What entities are required to report?

Unless an exception applies, every entity that is organized under the laws of a state or the federal government (i.e., corporations, LLCs, many partnerships, etc.) are required to report to FINCEN certain information about the entity’s beneficial owners. Severe penalties for failing to submit the required information can be assessed. As of January 25, 2024, the penalties have increased--see our blog, FinCEN BOI Reporting Penalties Increased for Inflation.

Check out our blog, Corporate Transparency Act Introduces Beneficial Ownership Reporting Requirements for more information about what must be reported to FINCEN, and the exceptions that apply. Additional information can be found at FINCEN’s FAQ page.

Editor’s Note: As of March 1, 2024, members of the National Small Business Association (NSBA) are not subject to the Corporate Transparency Act (CTA) and therefore do not have any Beneficial Ownership Information (BOI) reporting obligations. Check out our blog, UPDATE: Corporate Transparency Act Ruled Unconstitutional, Here’s How BOI Reporting is Affected for the details.

What is the reporting deadline?

Entities in existence prior to January 1, 2024, have until January 1, 2025 to file their initial report. An entity formed during 2024 will have 90 days from the formation date to file its initial report.

BOI reporting is not an annual filing, but after the initial filing the report must be updated within 30 days of any change to previously reported information.

What is the filing process?

Most entities are required to complete this filing. However, due to its legal nature, KLR isn't able to prepare these reports for clients. While some of the information needed for the BOI filing may overlap with what we request for tax or other compliance purposes, the BOI requirements are beyond the services we're permitted to provide.

The reporting requirements are complex, and we recommend consulting with an attorney or a corporate compliance service company to assist you with this filing requirement. For your convenience, here are some resources:

• FinCEN BOI FAQs: https://www.fincen.gov/boi-faqs
• FinCEN BOI Filing Portal: https://www.fincen.gov/boi