Beneficial Ownership Information

Effective January 1, 2024, many companies in the United States must report information about their beneficial owners—the individuals who ultimately own or control the company—to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.

Filing is secure and free of charge. Beneficial ownership information reporting is not an annual requirement. Unless a company needs to update or correct information, a report only needs to be submitted once.

Companies required to report are called reporting companies.

Reporting companies may need to obtain information from their beneficial owners and report that information to FinCEN.

Your company may be a reporting company if it is:

1. A corporation or limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or

2. A foreign company registered to do business in any U.S. state or Indian tribe by such a filing.

Twenty-three types of entities are exempt from beneficial ownership information reporting requirements, including publicly traded companies, nonprofits, and certain large operating companies.

FinCEN’s Small Entity Compliance Guide includes checklists for each of the 23 exemptions that may help determine whether your company qualifies for an exemption.

FinCEN’s Small Entity Compliance Guide includes this table and checklists for each of the 23 exemptions that may help determine whether a company warrants an exemption. Companies should carefully review the qualifying criteria before concluding they are exempt.

Companies that have more than one entity may benefit from REDW expertise in navigating these new reporting requirements.

The new BOI reporting form is now available for review and data entry. Businesses are encouraged to seek trusted guidance before filing.

Businesses will be able to obtain a FinCEN Identifier number that can be used to file their initial BOI and to provide updates or corrections regarding the ownership or dissolution of the business. Alternatively, the number can be obtained with the filing of the first report. While it is not currently required, an identifier can also facilitate submission of BOI reports by more than one individual.

The new FinCEN BOI reports require the collection and submission of information specific to everyone included in the report, including:

• The individual’s name
• Date of birth
• Residential address
• An identifying number such as one from a passport or U.S. driver’s license
• An image of the identification document

While ownership interest is simple to define, beneficial owners also include those who exercise substantial control over the company. The substantial control threshold is met by those who meet any of four criteria:

1. A senior officer
2. Has authority to appoint or remove certain officers or a majority of the directors of the reporting company
3. An important decision-maker—someone who directs, determines, or has substantial influence over important decisions, e.g., the business, finances, or structure of the entity.
4. Any other form of substantial control over the company

It’s important to note that parent companies may not file a single BOI on behalf of a group of companies.

Reporting companies can report beneficial ownership information electronically through FinCEN’s website for free, though companies that have more than one entity may benefit from REDW expertise in navigating these new reporting requirements.

Beneficial ownership information reporting is not an annual requirement. Unless a company needs to update or correct information, a report only needs to be submitted once.

FinCEN began accepting reports on January 1, 2024.

• If your company was created or registered prior to January 1, 2024, you will have until January 1, 2025 to report BOI.
• If your company is created or registered in 2024, you must report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.
• If your company is created or registered on or after January 1, 2025, you must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
• Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 days.

As specified in the Corporate Transparency Act, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. However, this civil penalty amount is adjusted annually for inflation.

As of the time of publication of this FAQ, the penalty amount is $591. A person who willfully violates the BOI reporting requirement may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000.

Potential violations include:

• willfully failing to file a beneficial ownership information report;
• willfully filing false beneficial ownership information; or
• willfully failing to correct or update previously reported beneficial ownership information.

FinCEN has learned of fraudulent attempts to solicit information from individuals and entities who may be subject to reporting requirements under the Corporate Transparency Act.

These fraudulent scams may include:

• Correspondence requesting payment. There is NO fee to file BOI directly with FinCEN. FinCEN does NOT send correspondence requesting payment to file BOI. Do not send money in response to any mailing that claims to be from FinCEN or another government agency.
• Correspondence that asks the recipient to click on a URL or to scan a QR code. Those emails or letters are fraudulent. Do not click any suspicious links or attachments or scan any QR codes in emails, on websites, or in any unsolicited mailings.
• Correspondence that references a “Form 4022,” or an “Important Compliance Notice.” This correspondence is fraudulent. FinCEN does not have a “Form 4022.” Do not send BOI to anyone by completing these forms.
• Correspondence or other documents referencing a “US Business Regulations Dept.” This correspondence is fraudulent; there is no government entity by this name.

Information about FinCEN’s beneficial ownership information reporting requirements is available at https://www.fincen.gov/boi — This webpage includes a Small Entity Compliance Guide and responses to Frequently Asked Questions (FAQs) that can assist with your reporting questions.

You may also submit questions to FinCEN at https://www.fincen.gov/contact

Additional information on the Corporate Transparency Act can be found here: https://www.fincen.gov/boi/

Additional information on current customer due diligence requirements can be found here: https://www.fincen.gov/resources/statutes-and-regulations/cdd-final-rule.

File your report with the BOI E-Filing System