New BOI Law: Compliance Guide for Businesses

Most small businesses are now required to file a BOI (Beneficial Ownership Information) Report by January 1, 2025, or face hefty fines.

Important Update: New Beneficial Ownership Information (BOI) Law

Starting January 1, 2024, a new federal law went into effect requiring small businesses and corporations to file Beneficial Ownership Information (BOI) reports with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). This law aims to help authorities prevent money laundering, tax evasion, and other illegal activities by ensuring transparency around who owns and controls companies.

What is Beneficial Ownership?

A beneficial owner is any individual who, directly or indirectly:

• Owns 25% or more of a company, OR
• Exercises significant control over the company.

Who is Required to File?

Most businesses formed in the U.S., including corporations, limited liability companies (LLCs), and other similar entities, must file a BOI report. However, certain entities such as publicly traded companies, banks, and certain regulated industries are exempt.

What Information is Required?

The BOI report must include:

• Full legal name
• Date of birth
• Current residential or business address
• A unique identifying number from an acceptable document (e.g., driver’s license or passport) for each beneficial owner.

Filing Deadlines

• Existing companies: Required to file by January 1, 2025.
• Newly formed companies: Must file their BOI report within 30 days of formation, starting January 2024.
• Changes in beneficial ownership: Must be reported within 30 days of the change.

Penalties for Non-Compliance:
Failure to comply with BOI reporting requirements can result in civil and criminal penalties, including fines of up to $500 per day of non-compliance and potential imprisonment.

Next Steps for Businesses

If you own or control a business that falls under this law, and haven’t filed this form yet, now is the time to prepare. Read more about this on the FinCen website. You can also start the filing process here:

https://www.fincen.gov/boi

Ensure your records are up to date and review your company’s ownership structure.

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