Beneficial Ownership

Information Reporting

Everything You Need to Know


So what the heck is BOI reporting and how does it impact your business? We’ve compiled everything you need to know about this new law so you can get up to speed and stay in compliance.

What’s the Beneficial Ownership Reporting Rule?

Effective January 1, 2024, the Beneficial Ownership Information Reporting Rule requires small businesses to disclose information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).

The Rule was conceived as a legislative response to address the deficiencies in corporate ownership transparency and strengthen regulatory oversight of financial activities.

Enacted as part of the broader Corporate Transparency Act, the rule aims to achieve several key objectives:

    1. Enhanced Transparency: The rule seeks to enhance transparency within the corporate landscape, enabling regulatory authorities to ascertain the individuals who ultimately own or control business entities.
    2. Combatting Financial Crimes: BOI Reporting is a vital tool in the fight against financial crimes such as money laundering, terrorist financing, and corruption. By identifying beneficial owners, regulatory authorities can mitigate the risks associated with illicit financial activities and disrupt criminal networks.
    3. Facilitating Law Enforcement Efforts: BOI disclosure facilitates law enforcement investigations and regulatory actions, enabling authorities to trace the proceeds of criminal activities and hold accountable those responsible for illicit conduct.

How does the Rule impact small businesses?

The BOI Reporting Rule has significant implications for small businesses:

  1. Compliance Burden: Businesses subject to the reporting requirements must invest resources in identifying and verifying their beneficial owners, ensuring accurate and timely submission of the required information to FinCEN. Failure to comply with the reporting obligations may result in penalties and sanctions.
  2. Enhanced Regulatory Oversight: The rule enables regulatory authorities to exercise greater oversight of corporate ownership structures, facilitating more effective monitoring and enforcement of AML and CTF regulations. Enhanced transparency supports risk assessment and mitigation efforts, strengthening the resilience of the financial system.
  3. Improved Law Enforcement Capabilities: Disclosure of beneficial ownership information empowers law enforcement agencies to trace illicit financial flows, disrupt criminal networks, and prosecute those involved in financial crimes. Access to accurate and comprehensive ownership data enhances investigative capabilities and facilitates collaboration among law enforcement entities.

Businesses subject to the reporting requirements must prioritize BOI Reporting to stay in compliance with the rule and avoid penalties with FinCEN.

What are the BOI report filing deadlines?

  • For businesses formed before January 1, 2024, the general deadline to file the Beneficial Ownership Information Report is December 31, 2024.
  • Businesses formed on or after January 1, 2024, are granted a 90-day window after their formation date to file the BOI Report.
  • Businesses that make amendments to their formation documents after January 1, 2024, are required to submit a new BOI Report within 30 days of the amendment. This ensures that any changes to the ownership or control structure of a business are promptly reflected in the reporting framework.

Meeting Reporting Obligations:

To meet the deadlines for filing the Beneficial Ownership Information Report, companies must proactively assess their reporting requirements and gather the necessary information about their beneficial owners. This may involve conducting due diligence to identify individuals who qualify as beneficial owners and ensuring the accuracy and completeness of the reported information.

By staying organized and proactive, businesses can streamline the reporting process and avoid potential delays or non-compliance issues. It’s essential to leverage available resources and seek guidance from legal and compliance professionals to navigate any complexities associated with the reporting requirements.

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