What You Need to Know about BOI Reporting Requirements

The Corporate Transparency Act was enacted in 2021 and requires most corporations and limited liability companies to report information about their owners to the United States Department of Treasury’s Financial Crimes Enforcement Network, known as FinCEN. The purpose is to curb the use of anonymous shell companies engaging in illegal activities such as money laundering, drug trafficking, and tax fraud. Here is what you need to know about these important reporting requirements.

​Who Must Comply with BOI Reporting Requirements?

The Corporate Transparency Act (the “CTA”) requires all “reporting companies” to file reports with FinCEN disclosing their beneficial owners. Under the CTA, “reporting companies” includes any entity formed by filing documents with any state’s secretary of state or similar office. This includes:

  • Corporations
  • Limited Liability Companies (LLCs)
  • Limited Liability Partnerships (LLPs)
  • Limited Partnerships (LPs)
  • Business Trusts (or statutory trusts)

The CTA does exempt certain entities from its reporting requirements, such as publicly traded corporations, banks, insurance companies, tax exempt entities, and certain other entities operating within heavily regulated industries.

​What Information Must be Reported?

The CTA requires disclosure of information regarding “beneficial owners” of the entity. This includes any individual who exercises “substantial control” over the entity or owns or controls at least 25% of the entity. Reporting companies are required to disclose each individual’s full legal name, date of birth, residential address, a unique identifying number from an active identification document such as a state-issued ID or a U.S. passport, and a copy of the identification document. The CTA also requires businesses formed after January 1, 2024 to disclose information regarding “company applicants,” or the individuals responsible for filing its business formation documents.

​Are BOI Reports Publicly Accessible?

No. The CTA restricts access of beneficial ownership information to certain federal agencies, state and local government agencies, and financial institutions. Each of these groups are subject to security and confidentiality requirements.

​When Do I Have to File a BOI Report?

The CTA contains no annual reporting requirements. This means you do not need to file an annual BOI report. The CTA only requires that all non-exempt entities file an initial BOI report and then report any updates or corrections as necessary.
  • Entities formed before January 1, 2024 have until January 1, 2025 to file initial reports.
  • Entities formed between January 1, 2024 and December 31, 2024 have until 90 days after formation to file their initial reports.
  • Entities formed after January 1, 2025 must file an initial BOI report within 30 days of formation.
  • All entities must file an updated report within 30 days of any changes to any reported beneficial ownership information.

​What Happens if I Fail to File a BOI Report?

The CTA imposes civil and criminal penalties for the failure to file a BOI report or for willfully providing false information:

  • Civil penalties of up to $500 per day for failure to comply, or
  • Criminal penalties of up to $10,000 or two-years imprisonment for providing false or fraudulent information.

​Contact us

Complying with the CTA’s BOI reporting requirements is crucial to avoid potential penalties. The above information is subject to change and may not be an exhaustive list of all requirements or exemptions. Contact Forrest McPadden at (860) 757-3828 or fill out the contact form below to discuss your BOI reporting obligations.

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