Understanding BOI Reporting: What You Need to Know

Starting January 1, 2024, domestic and international businesses operating within the United States must comply with the reporting requirements for the reporting of the Beneficial Ownership Information (BOI). This mandate is part of the Corporate Transparency Act (CTA), which aims to bolster national security and combat money laundering.

Under these new regulations, businesses must submit specific details about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). The required information includes each owner’s name, address, date of birth, and identification number, which must be obtained from a government-issued document like a driver’s license.

FinCEN describes a beneficial owner as any individual who either:

• Directly or indirectly exercises significant control over the company

OR

• Holds at least 25% of the company’s ownership interests

The rules elaborate on “substantial control” and “ownership interest.” Additionally, the CTA outlines specific exemptions for five categories of individuals, distinguishing them from the standard definition of a “beneficial owner.”

* Failure to comply or submit inaccurate information can lead to hefty fines and severe legal repercussions.*