BOI – Beneficial Ownership Information

In 2021 Congress passed the Corporate Transparency Act aimed at reducing money laundering. It is a small business reporting requirement with potential penalties including prison for committing a felony by not reporting.

Repeat, failing to fill out this form is a potential felony with two years of prison time, plus a potential daily penalty over $500.

Any company created in the United States that has registered with a secretary of state or any similar office under the laws of a state or Indian tribe, or foreign companies registered to do business in the U.S., must comply with these new reporting requirements.

This means that small businesses that are LLCs (including single-member LLCs), S corporations, partnerships, or C corporation must comply. There are, however, nearly two dozen types of businesses that are exempt from these new reporting requirements, including insurance companies, banks, certain large businesses, and tax-exempt entities.

NOTICE: As many of you know, the BOI reporting requirements has been the subject of litigation.  As of December 26, BOI reporting is voluntary. WS CPAs recommends that business owners consider filing voluntarily, or at the least be prepared to file BOI reports as the requirements could be reinstated at any time. On December 5, a District court placed an injunction on the requirement for companies file the new BOI report.  Then on December 23 the Fifth circuit court of appeals lifted that injunction and the requirement was in place again with updated deadlines. Three days after that, another panel said it was reinstating a lower court’s injunction that halts BOI enforcement. Filing a BOI report is voluntary at this time.

If your business is an LLC or corporation, including a single member LLC, you must fill out this form by the end of 2024, and if you start a new business in 2024 or later, you must report within 90 days of formation. Reporting is done with a special electronic filing with the Treasury Department’s Financial Crimes Enforcement Network (Not the IRS).

Some exemptions exist, primarily for larger companies and not-for-profit entities.

Initial Reporting

• New companies formed after 1/1/2024 within 90 days of formation.
• Existing companies formed before 1/1/2024 by 1/1/2025.

Updates: Within 30 days of change in beneficial ownership, name or address change

Annual reporting: None

The required information includes owners and, for new businesses formed in 2024, the company applicants.

To clarify, even if you have set up an LLC just to own a rental property this form is required, and a separate filing and form is required for every single entity, whether an LLC, an S corporation, or a C Corporation.

We are not able to file this report on your behalf – we are not experts in this area — here are your options:

1. File yourself – for free.
   Companies can complete BOI reports on FinCEN’s website. FinCEN has also produced a 5-minute video regarding the reporting process –  click here to watch. Most businesses will be able to complete the process in under 10 minutes.

1. Contact your business attorney.
   Many attorneys are assisting clients with initial BOI filings and/or continued compliance. Client are reporting a wide range of attorney fees for this service so check with your attorney on their fee schedule for this.

1. NEW! Get assistance from Joseph & Bryant in partnership with Williams & Schiller.
   Additionally, we are excited to announce a recent partnership with the firm Joseph & Bryant, who specialize in BOI filings. Learn more here. They can guide you through the process of getting and staying compliant for a fee of $200 – visit Joseph & Bryant’s online questionnaire to get started today.Please note this is a fee-based partnership, and Williams & Schiller may receive a portion of the revenue if you choose this service.

Learn more about Williams & Schiller’s partnership with Joseph & Bryant. and how they can help with your BOI reporting.

To fill out the form you need the following information before you go to the website.

For the Company or Entity:

1. Full legal name according to the Secretary of State (download a “good standing” report),
2. Any trade and “doing business as” names,
3. A complete current street address of the principal place of business (A P.O. Box or the address of a 3rd party agent does not comply with this requirement),
4. The state, tribal or foreign jurisdiction of formation, and
5. The IRS Taxpayer Identification Number.

** A change of any of these 5 items at any time must also be reported within 30 days to the Financial Crimes Enforcement Network, including an address or owner change. **

 For the Owners and Applicants:

For each owner of at least 25% of the entity (directly or indirectly), and any beneficial owner meeting the definitions, the reporting must include for each owner:

1. Legal name and date of birth,
2. Address,
3. Unique identifying number and the issuing jurisdiction from one of the following documents:
   1. passport issued to the individual by the United States government, or
   2. identification document issued to the individual by a State, local government, or Indian tribe for the purpose of identifying the individual, or
   3. driver’s license issued to the individual by a State, or
   4. passport issued by a foreign government to the individual, if the individual does not possess any of the other documents described.
4. An image of the document from which the unique identifying number was obtained (ie drivers license or passport).

Additionally, the rule requires that reporting companies created after January 1, 2024, provide the four pieces of information and document image for company applicants.

After your initial BOI report is filed, an updated BOI report must be filed within 30 days following any change in information previously filed with FinCEN. Any inaccuracies discovered on previously-filed reports must also be reported within 30 days.

The Federal government wants to know who owns or is a beneficial owner of businesses in the U.S. This information is meant to protect national security by making it easier to find corruption, money laundering operations, tax evasion, and drug trafficking organizations. They will be sharing this information with approved agencies including Federal and State law enforcement and Federal tax authorities.

FinCEN defines a beneficial owner as an individual who either directly or indirectly exercises substantial control over the reporting company or owns or controls at least 25% of the reporting company’s ownership interests. A person has “substantial control” if they are:

• A senior officer (president, chief executive officer, chief financial officer, chief operating officer, general counsel, or any other officer).
• An individual with the authority to appoint or remove certain officers or directors with a majority interest in the reporting company.
• An important decision-maker for the reporting company.
• Someone who qualifies under the rules outlined in FinCEN’s Small Entity Compliance Guide.  (Select Version 1.1/English to view the guide)

There are 23 entity types that are exempt from BOI reporting requirements, including publicly traded companies meeting specified requirements, many non-profit organizations, certain large operating companies and certain inactive companies. Detailed information on each exemption criterion is available in FinCEN’s Small Entity Compliance Guide. (Select Version 1.1/English to view the guide)

Inactive Companies:
All six of the following criteria must be met for an entity to be inactive under BOI reporting rules:

1. Existed on or before January 1, 2020.
2. Is not engaged in active business.
3. Is not owned by a foreign person, whether directly or indirectly, wholly or partially.
4. Has not experienced any change in ownership in the preceding twelve-month period.
5. Has not sent or received funds greater than $1,000 directly or through any financial account in which the entity or any affiliate had an interest in the preceding twelve months.
6. Does not hold any kind or type of assets, whether in the U.S. or abroad, including any ownership interest in any corporation, limited liability company, or other similar entity.

Companies that fail to file BOI can face serious consequences, including a fine of $591 a day, up to $10,000, and two years in prison. Similarly, severe penalties apply for filing false information, underlining the importance of compliance and the potential risks of non-compliance.

Companies may avoid penalties if they correct a mistake or omission within 90 days of the original report’s deadline.

Because of the incredible amount of confidential information that must be provided, and the amount of fraudulent providers out there, we have been cautioning clients NOT to use unknown 3rd party solicitors, because they could use this confidential information to steal your or your company’s identity or data. Do this yourself, contact your business attorney, or check out our partnership with a firm specializing in BOI filings..