Beneficial Ownership Information
BOIR INFORMATION
Starting Jan. 1, 2024, most corporations and LLCs created in or registered to do business in the U.S. will need to report information on their beneficial owners to the Financial Crimes Enforcement Network (FinCEN) under the Corporate Transparency Act (CTA).​
The CTA introduced a filing requirement for most entities beginning January 2024. The purpose is to report who owns or controls an entity to the FinCEN, so that they can track unlawful entities and illegal activity. This is a one-time filing, unless there are any changes to the entity, in which case, these updates would need to be reported within 30 days of a change occurring.
With the steep penalties for noncompliance, it's important to understand the reporting requirements.
As specified in the CTA, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $591 for each day that the violation continues. A person ... may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000.
Who is required to file?
LLCs, S-Corps, C-Corps, Partnerships
Companies required to report are called reporting companies. There are two types of reporting companies:
-
Domestic reporting companies are corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States.
-
Foreign reporting companies are entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office.
​
A reporting company is required to file if it existed as a legal entity for any period of time on or after January 1, 2024. If you dissolved a company in 2024, then you will still need to file the BOI.
What if my business is inactive?
If you have a company that was not completely dissolved prior to January 1, 2024, it is still possible that you are not required to file a BOI Report if you fall into the exemption for inactive entities.
An inactive entity is going to be an entity that:
-
Was in existence on or before January 1, 2020;
-
Is not engaged in active business;
-
Is not owned by a foreign person, whether directly or indirectly, wholly or partially;
-
Has not experienced any change in ownership in the preceding twelve-month period;
-
Has not sent or received any funds in an amount greater than $1,000, either directly or through any financial account in which the entity or any affiliate of the entity had an interest, in the preceding 12 month period; and
-
Does not otherwise hold any kind or type of assets, whether in the United States or abroad, including any ownership interest in any corporation, limited liability company, or other similar entity.
Did you close an entity in 2020-2023?
Each state varies on what their Secretary of State considers "closing" or "dissolving" a business. In Kentucky, for instance, failure to file an annual report will automatically "administratively dissolve" an entity. While this is an acceptable process for closing a business in Kentucky, it will not be sufficient for the new BOI filing requirement. The FinCEN states all entities that "did not entirely complete the process of formally and irrevocably dissolving before January 1, 2024" must file. The only exceptions here are entities that fall under exemption for inactive entities.
Be sure to check your state's Secretary of State website for the status and activity of your entity. If it has been active on or after Jan 1, 2020, and has not been FORMALLY dissolved, a BOI is required for your former entity.
​
If you need help determining the status of your entity, please contact us.
When does the BOI have to be filed?
A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025 to file its initial beneficial ownership information report.
​
A reporting company created or registered on or after January 1, 2024, and before January 1, 2025, will have 90 calendar days after receiving notice of the company’s creation or registration to file its initial BOI report. This 90-calendar day deadline runs from the time the company receives actual notice that its creation or registration is effective, or after a secretary of state or similar office first provides public notice of its creation or registration, whichever is earlier.
​
Reporting companies created or registered on or after January 1, 2025, will have 30 calendar days from actual or public notice that the company’s creation or registration is effective to file their initial BOI reports with FinCEN.
What happens for failure to report or update information?
As specified in the Corporate Transparency Act, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. However, this civil penalty amount is adjusted annually for inflation. As of the time of publication of this FAQ, this amount is $591.
​
A person who willfully violates the BOI reporting requirements may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.
How to file the BOI?
U'Sellis & Company, CPA can file this report on your behalf for $100 per entity. If you would like assistance with this, please let us know as soon as possible by going HERE or email Detra - Detrab@uselliscpa.com
​
You can file the report yourself to the FinCEN through the BOI E-Filing System.​​​​​