Have you filed your beneficial ownership information reports yet? Are you starting a new company and have heard the term “BOI reports” bandied about and don’t quite understand all that that entails?
Here, we’ll answer some of the most commonly asked questions about BOI reports. For more information about beneficial ownership information and how that can be integrated into your compliance and risk management processes, the CPAs here at Golub, Senitt, Rosenberg & Co are here to help.
What Is Beneficial Ownership Information?
Beneficial ownership information is identifying information about the people who either directly or indirectly own or control a company.
This can include those with significant ownership stakes in a company, those who have significant control over decision-making, or a combination of the two. People with substantial control can include: senior officers, people with the authority to appoint or remove certain officers or directors of the company, people who are important decision-makers in or for the company, and people with any other form of substantial control over the company, such as someone with influence over important decisions.
Essentially, beneficial ownership information identifies the real people behind a business, even if they aren’t the legal owner on paper.
What Information About Beneficial Owners Must Be Reported?
Reporting companies must provide the following information about all beneficial owners in their BOI reports:
- Legal name
- Date of birth
- Residence address
- Identifying number and issuing jurisdictions from driver’s licenses, passports, or other such authorized documents
- Image of the document the number is from
When Is This Report Due?
Reporting companies created or registered prior to January 1, 2024 must file by January 1, 2025.
Reporting companies created or registered after January 1, 2024 must file within 90 days of receiving actual or public notice of formation or registration.
Reporting companies created or registered on or after January 1, 2025 must file their initial report within 30 days of receiving actual or public notice or formation or registration.
Why Do Companies Have To Report This?
The reason why companies have to report beneficial ownership information is in order to combat money laundering and other illicit activities. Reporting beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) is part of the Corporate Transparency Act.
Law enforcement and financial institutions use this information in order to identify potential risks with a company, such as when individuals may try to hide true ownership through shell companies in order to partake in money laundering schemes. Without access to beneficial ownership information, it can be challenging and time-consuming to identify patterns of risk.
Thus, BOI reports are part of basic due diligence and typically are regulator requirements. It is part of risk management and compliance with laws on sanctions, fraud, money laundering, and terrorist financing.
Who Has To Report Beneficial Ownership Information?
FinCEN BOI rules apply to the following two types of reporting companies:
- Domestic reporting companies. These include corporations, limited liability companies, and other entities created through filing a document with a secretary of state or similar US office.
- Foreign reporting companies. These include corporations, limited liability companies, and other entities that were formed under the law of a foreign country that register to do business in the United States through filing a document with a secretary of state or similar US offices.
Are Any Companies Exempt From Having To Report?
Yes, there are some companies that are exempt from having to file BOI reports. These include some nonprofits, publicly traded companies that meet specified requirements, certain large operating companies, and more. However, this reporting obligation applies to millions of businesses in the US or that operate in the US.
CPA Services In And Around Glendale, CA
Golub, Senitt, Rosenberg & Co provides the full suite of CPA services in and around Glendale, CA. Whether you need help with your BOI reports, tax planning, fractional CFO services, or another type of accounting service, please don’t hesitate to contact us today. We are here to help you, however we can.
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