Starting January 1, 2024, a new federal mandate requires specific U.S. and foreign entities to report Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN). We recommend that you complete this reporting yourself and engage an attorney or a registered agent service company to do so on your behalf. Thompson Greenspon is not providing these services.

Who Needs to Report?

Domestic and Foreign Entities: If your business is a corporation, LLC, or a similar entity formed in the U.S. or registered to do business in the U.S., you may be required to report. This requirement includes current LLCs that may be acting as holding companies, used for real estate, rental properties, farms, businesses for which there is no current activity, etc.

Exemptions:

Not all entities are required to report. For example, publicly traded companies and certain large operating companies are exempt. A comprehensive list of exemptions is available on the FinCEN website here.

Who is a Beneficial Owner?

A beneficial owner is an individual who either directly or indirectly: (1) exercises substantial control over the reporting company; or (2) owns or controls at least 25% of the reporting company’s ownership interests. See FinCEN’s BOI FAQ for more information.

FinCEN’s Small Entity Compliance Guide provides checklists and examples that may assist in identifying beneficial owners.

During the reporting process, information will be required about the reporting company, the beneficial owner, and the company applicant. This information includes the requirement to upload images of identification.

Reporting Process:

The filing process is straightforward, free of charge, and directly on the FinCEN website. Additional future reporting is required when an update to prior information is submitted or a correction is needed. Updates include such items as beneficial owner name and address changes, ownership changes, and other reasons. Please refer to the FinCEN website for a complete list of times when an update is required.

Deadlines:

• Entities formed or registered before January 1, 2024, have until January 1, 2025, to comply.
• New entities formed or registered in 2024 have specific deadlines based on their registration date.

For a detailed guide on compliance and to understand if your business is affected, please refer to FinCEN’s Small Entity Compliance Guide.

To stay informed, subscribe to FinCEN updates: https://service.govdelivery.com/accounts/USFINCEN/subscriber/new.

This regulation aims to enhance transparency in business ownership and control, and we strongly recommend reviewing your company’s status regarding this requirement. Penalties for non-compliance are punitive.

Every new regulation is an opportunity for predatory activity. Please be vigilant for potential fraudulent solicitations for information, as FinCEN does not send unsolicited requests.