BOI Report - Is this still required?
Updated: Oct 2
A federal court has challenged the BOI filing requirement contesting that it may be unconstitutional. The government will likely appeal the preliminary injunction after which time an appellate court will have the opportunity to uphold or overrule the injunction. This is something to keep an eye on. If the injunction is overruled you may still be required to comply. Keep reading to learn more.
There is a new filing requirement in 2024 for LLC’s, and many folks are being caught off guard. Who all is affected? Well, 99% of the small business registered to do business in the US will be required to comply! And the penalty for noncompliance is $500/day up to $10,000!
It’s all an effort to prevent terrorism, money laundering, and other illicit activities. The Financial Crimes Enforcement Networks (FinCEN) will do this by permitting Federal, State, Local, and certain Foreign Officials to obtain “Beneficial Ownership Information” (BOI) by submitting a request through the applicable government agency.
Reporting Personal Information
Basically, anyone with 25% or more ownership in the entity MUST provide their detailed personal information for an accurate submission of this form.
Another way personal information may be required for an individual is when they exercise substantial control. This is where the waters muddy. If a person is a senior officer or has the ability to appoint or remove certain officers they have substantial control. If the individual is a decision-maker for the company or maintains any other form of substantial control they are considered to maintain substantial control.
Click HERE to visit the BOI frequently asked questions related to Beneficial Ownership Reporting including the 23 types of business that are exempt. Or Click HERE for the FinCEN Compliance Guide. Or Scan the QR code for more information from FinCEN.
Reporting Companies
Domestic reporting companies: Corporations, limited liability companies (LLC), and any other entities created by the filing of documents with a secretary of state or any similar office in the United States.
Foreign reporting companies: entities formed under the law of a foreign country that have registered to do business in the United States by filing a document with a secretary of state or any similar office.
Filing Frequency
Filing may only be required one-time. Currently, only unless the beneficial ownership changes would additional fillings be required. If that happens, you’ll have 30 days to complete a new filing.
Company Applicant
Only reporting companies that are created or registered after January 1st, 2024 will need to report their company applicant. A reporting company will have only up to two individuals who can qualify as company applicants:
The individual who directly files the document that creates or registers the company.
If more than one person is involved in the filing, the individual who is primarily responsible for directing or controlling the filing. It MUST be noted that a company applicant may not be removed from a BOI report even if the company applicant no longer has a relationship with the reporting company.
The Breakdown
When to File
· Companies created prior to 1/1/24 have until 1/1/2025 to file the BOI Report.
· Companies registered on or after 1/1/24 and before 1/1/25 must file the initial BOI Report within 90 calendar days after receiving the entity creation notice. Companies formed after 1/1/25 are allotted only 30 days.
What to File
Companies Created before 1/1/2024: The entity provides information about itself, and its beneficial owners.
Companies created after 1/1/2024: The entity provides information about itself, its beneficial owners, and the company applicants responsible for registration of the entity.
Notes:
A parent company cannot file a single BOI report on behalf of its group of companies. Each entity has its own separate reporting requirements. Rental properties established as an LLC are ALL required to comply. For owners rentals who have established multiple LLCs be ready to file the BOI Report for each entity to maintain compliance!
Book a New Client Appointment
See if Rangeview Tax & Accounting is a good fit for you! We offer in-person, ZOOM, and telephone chats.
