What is the new BOI rule for FinCEN?
Starting January 1, 2024, the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury, has mandated that most legal entities, unless exempt, are now required to file a Beneficial Ownership Information Report or BOI Form.
These new regulations are designed to increase transparency and make it harder to cover up any illegal activities through anonymous corporate structures.
Beneficial Ownership Information refers to details about the individuals who ultimately own or control a legal entity. We have provided a summary below of our understanding based on various legal opinions we have received, but should not be considered legal advice!
If you are interested in Accountix filing your BOI Form for you, or if you have any questions about the new requirements use this link to schedule a meeting. Here we will be happy to informally answer questions or start the process of gathering information so we can assist with this filing for you.
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Who has to file a Beneficial Ownership Information Report?
Any US Company that is a corporation, LLC, or was created by filing a document with the secretary of state or similar office under the law of a state or Indian tribe. The new FinCEN reporting likely applies to your businesses and any rental properties owned in LLCs.
Common Exemptions:
- Non-Profit Entities
- Bank or Credit Union
- Investment Companies
- Insurance Companies
- Publically Traded Companies
For a full list of exemptions, please refer to page 11 of this PDF.
Who is a Beneficial Owner?
A company can have multiple beneficial owners, a beneficial owner is any individual who:
- Exercises substantial control over the entity, substantial control includes:
- Senior Officer
- Authority to appoint or remove officers or directors
- Important decision maker in business, finances, or structure of the entity
- Exercises substantial control over the entity, substantial control includes:
- OR owns or controls at least 25% of the ownership interest
What You Need to Know as A Business Owner
A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial BOI form.
If a company is registered after January 1, 2024, the initial BOI must be completed within 90 calendar days.
If you are not exempt, you will be required to register for your FinCEN identifier through the web portal and file your BOI report online.
What happens if you don’t file a BOI Form?
If you willfully violate the BOI reporting requirements, penalties include:
- Civil penalties up to $591 for each day of violation
- Crimial fines up to $10,000
- Possible imprisonment of up to two years.
It’s important to note that there are no limits on the number of people who can be penalized for violations of BOI filing rules. This includes senior managers and corporate entities. The following individuals can be held accountable for willful violations of the BOI filing rules:
- Anyone who knowingly files a false or fraudulent BOI report on behalf of a company.
- Anyone who knowingly provides false information to the filer of a BOI report.
- Beneficial owners who knowingly fail to file a BOI report or file a false report. This includes corporate officers, directors, or employees, and LLC members and employees.
We understand that navigating regulatory changes can be complicated, so we have created a package to help business owners like yourself break it down and make sure you are compliant. Depending on your business needs, we will walk you through every requirement, including applying for your FinCen identifier, determining your Beneficial Owners and compiling the required documentation, and finally filing your actual report with FinCEN.
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