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On Behalf of | Mar 7, 2024 | Firm News |

In 2021, Congress enacted the Corporate Transparency Act.  This law requires companies that are formed or operate in the United States to report their Beneficial Ownership Information (BOI) to the United States Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).  FinCEN promotes national security and protects the United States financial system from fraud and abuse by criminals and corrupt officials.  Collecting BOI will help protect national security and make it harder for criminals and other bad actors to hide from the law.

Companies will be able to file their BOI reports electronically using FinCEN’s secure filing system.  The reports will be stored in a secure database and shared only with authorized users for purposes specified by law.  The system will provide the filer with a confirmation once a completed report is filed with FinCEN.

What Companies must report BOI:

If a Corporation, LLC, or other similar legal entity had to file a document with the Secretary of State to register their company, they will need to report BOI to FinCEN.

There are 23 categories of entities that are exempt from the reporting requirement.  Examples include banks, credit unions, public utilities, and tax-exempt entities registered with the IRS.   The full list can be found on the FinCEN’s website at www.fincen.gov.

What information will need to be provided:

A Company will have to provide information about itself, its beneficial owners, and in some cases, the individuals that formed the Company (“company applicant”).  The reporting Company will need to provide their legal name and any trade name or DBA, mailing address, the jurisdiction in which the Company was formed/first registered, and the Company’s taxpayer identification number (TIN).

Each reporting Company’s beneficial owners and company applicants will need to provide their legal name, birthdate, address, and an identification number.

What is the difference between a beneficial owner and a company applicant:

A beneficial owner is an individual who exercises substantial control over the reporting company, or who owns or controls at least 25% of the reporting company.

A company applicant is an individual who files the document that creates or registers the company.  There can be up to two individuals who qualify as company applicants for a Company.  If there are more than two individuals involved in creating or registering a Company, the Company must choose two who are primarily responsible.

Please note, if a Company was created/registered before January 1, 2024, the Company does not need to report its company applicants.

Important Dates to Remember:

  • If a Company was created/registered before January 1, 2024, the Company has until January 1, 2025, to file its initial report.
  • If a Company was created/registered on or after January 1, 2024, and before January 1, 2025, the Company has 90 calendar days to file its initial report.
  • Companies created or registered on or after January 1, 2025, will have 30 calendar days to file their initial report.

For more detailed information regarding BOI reporting requirements, please review the Small Entity Compliance Guide attached.

If you find yourself still having more questions than answers, please feel free to contact Evenson Decker, P.A. at (320) 253-7130  and ask to speak to an attorney about the new BOI reporting requirements.