Business Ownership Information "LM"

Business Ownership Information Report (BOIR)

What is a BOIR?

In 2021, Congress enacted the bipartisan Corporate Transparency Act to curb illicit finance. This law requires many companies doing business in the United States to report information about who ultimately owns or controls them. The Beneficial Ownership Information Report (BOIR) is a new requirement under the Corporate Transparency Act (CTA) for U.S. businesses. It's designed to increase transparency in business ownership and help combat financial crimes.

Effective January 1, 2024, many companies in the United States must report information about their beneficial owners—the individuals who ultimately own or control the company—to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury

Why file and who needs to file?

Filing a Beneficial Ownership Information Report falls under the responsibility of corporations, limited liability companies (LLCs), and other similar entities created or registered in the United States. This includes any business registered before January 1st, 2024, which must submit its report by January 1st, 2025. The purpose of the filing is to assist the government in achieving the following goals:

Prevent money laundering and other financial crimes
Improve corporate accountability
Assist law enforcement in investigations

The report must include personal information about each beneficial owner of the business, including their full legal name, date of birth, residential address, and a unique identifying number from a government-issued ID (such as a passport or driver’s license).

***Keynote: Some businesses are fortunate to be exempt from filing a BOIR. Companies that fall under the exempt status are the following:

• Publicly traded companies registered with the Securities and Exchange Commission (SEC).

• Large operating companies that have been around for decades.

• Companies with more than 20 full-time employees in the U.S.

• An operating presence in the U.S.

• Companies with over $5 million in annual revenue.

• Other exemptions include government entities, banks, and specific nonprofits.

Deadlines and Penalties

If your company was created or registered before January 1, 2024, you will have until January 1, 2025, to report BOI.

If your company is or was registered in 2024, you must report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.

If your company is created or registered on or after January 1, 2025, you must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.

Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 days. Failure to file can result in both civil and criminal penalties. Civil penalties can result in a daily fine of up to $500 for each day the report is filed late or incorrectly. Willful failure to file a BOIR or intentionally providing false or fraudulent information can lead to criminal penalties such as fines up to $10,000 and or imprisonment, which can last up to two years.