On January 1, 2021, Congress enacted the Corporate Transparency Act, designed to curb illicit finance among US businesses. To limit the opportunity for businesses to engage in financial crimes, the Act requires businesses to electronically file a report with the Department of Treasury’s Financial Enforcement Crimes Network (FinCEN). On January 1, 2024, FinCEN began accepting these reports, known as Beneficial Ownership Interest (BOI) reports.
The BOI report requires certain companies, known as reporting companies, to provide information about both the company and any individuals who hold beneficial ownership interest in the reporting company. Reporting companies include any corporations, limited liability companies, and other entities created by the filing of a document with a Secretary of State or any equivalent office in the United States. This requirement extends to both domestically formed companies and companies formed under the law of a foreign country that have registered with a Secretary of State, or equivalent, to do business in the United States.
There are 23 exemptions listed by FinCEN. Companies who fall under one of these exemptions are not required to file the BOI Report. Guidance on if your company falls under these exemptions can be found at: https://www.fincen.gov/resources/statutes-regulations/guidance/guidance-determining-eligibility-exemption-currency
The report is only required to be filed once through FinCEN’s online secure filing system and there is no filing fee. However, an amended report needs to be filed within 30 days when there are changes with the reporting company’s information or its beneficial owners. The amended reports also do not have a filing fee.
A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial BOI report. A reporting company formed in 2024 will have 90 calendar days to file after receiving notice that its creation or registration is effective. Starting January 1, 2025, all companies formed in 2025 or after will have 30 days to file their BOI Report.
If your company is a reporting company, you will need to disclose which individuals hold beneficial ownership interest in your company. Beneficial owners are individuals who either exercise substantial control over a reporting company, or own or control at least 25% of the ownership interests of a company.
Additionally, companies formed after January 1, 2024, will also be required to provide information about company applicants, which are the individuals who file the BOI on behalf of the company. The report may be filed by an employee, an owner of the company or by a third-party service provider, such as an attorney. Given the complicated nature of determining beneficial ownership interest, and the severe penalties for incorrectly filing a BOI report, we strongly recommend that you contact one of our attorneys when you plan to file your BOI report.
The Wagoner Firm has been closely monitoring all information about the Corporate Transparency Act and the BOI reporting requirements and is committed to helping our clients work through the filing process. We remain available to discuss any specific questions or concerns you may have and can assist with the filing process at your convenience. Please do not hesitate to contact us!