Beneficial Ownership Information (BOI) Reporting
Effective Jan. 1, 2024, millions of entities are required to report information to a federal agency about the individuals who ultimately own or control them under the Corporate Transparency Act (CTA).
I am Jennifer Galstad-Lee, and at Avara Law, LLC, I help my clients in Howard County and across Maryland navigate this new reporting requirement and ensure compliance. There’s a lot to understand about the new systems, and I’ll be with you every step of the way.
FAQs About The New 2024 Federal Reporting Requirement – CTA BOI
Under the CTA, millions of small entities must file a beneficial owner information report with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). I want to make sure you have the answers you need to important questions such as:
What is beneficial ownership information?
Beneficial ownership information refers to identifying information about the individuals who directly or indirectly own or control a company.
Who is required to file?
Companies required to report are called reporting companies. There are two categories of reporting companies:
- Domestic – A corporation, a limited liability company (LLC), or a business otherwise created in the U.S. by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe.
- Foreign – A foreign company and was registered to do business in any U.S. state or Indian tribe by such a filing.
Almost all small businesses would fall into the category of reporting companies. LLCs, corporations, limited partnerships, and limited liability partnerships must check if they are reporting entities.
A trust may also be subject to the BOI reporting requirement if it holds ownership or substantial control of a reporting company. Such trust may need to report information of its trustees, beneficiaries or settlors.
Because of the law’s far-reaching applicability and substantial penalties, every entity must ensure its compliance each year.
Who does not have to file?
Twenty-three types of entities are exempt from the beneficial ownership information reporting requirements. These entities include publicly traded companies, nonprofits and certain large operating companies.
How do I report?
Reporting companies will have to report beneficial ownership information electronically through FinCEN’s website.
When Is BOI reporting due?
Reports will be accepted starting on Jan. 1, 2024. They are due
- Jan. 1, 2025, if a reporting company was created or registered prior to Jan. 1, 2024.
- Within 90 calendar days for a reporting company created or registered on or after Jan. 1, 2024, and before Jan. 1, 2025. The 90-day count starts after the company receives actual or public notice that the company is created or registration is effective, whichever is earlier.
- Within 30 calendar days for a reporting company that is created or registered on or after Jan. 1, 2025. The 30-day count starts after the company’s receipt of actual or public notice that its creation or registration is effective.
- Within 30 calendar days for any updates or corrections to beneficial ownership information that was previously filed with FinCEN.
What penalties could be imposed for failing to report BOI?
Failure to comply or the provision of false or fraudulent reports may result in civil fines of $500 a day for as long as the reports remain inaccurate. Failure to comply may also subject the violators to the criminal penalties of a $10,000 fine or two years in jail.
I’m Here To Answer Your Questions And Guide You Through Difficult Legal Matters
When you’re ready to understand the risks that face your business, turn to me. With my experience as an accountant, a lawyer and a business owner, I know how important the struggles you face are. I also know how important it is to get the answers you need right away. Text me at 202-596-1464 to get started or send an email.