The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FINCEN) began accepting beneficial ownership information (BOI) reports on Monday, January 1, 2024. Here’s what you should know about your filing requirements.

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 as of December 31, 2023, have until December 31, 2024, to file their initial report. An entity formed during 2024 will have 90 days to file its initial report, per updated guidance provided by FINCEN in late November 2023.

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?

Because the BOI reporting is a matter of legal compliance, KLR cannot make the filing on behalf of our clients. We encourage our clients to review our explanation of the BOI reporting rules and the information provided at the FINCEN FAQ page. If you determine that you have a filing requirement and understand the information you are required to provide, you can make the filing directly to FINCEN by using the FINCEN e-filing system.

If you need assistance to determine whether you have a BOI reporting requirement, we are advising our clients to work with their attorneys to make that determination and assist with the legal filing. There are also a number of corporate compliance service companies that can assist with the filing, for a reasonable fee.

Questions? We can point you in the right direction. Contact us.