NEW RULE: Business Owners Need To File Beneficial Ownership Information
As part of the Corporate Transparency Act passed in 2021, many companies are now required to report information about the individuals who ultimately own and/or control them to the U.S. Treasury Department's Financial Crimes Enforcement Network. The process, called Beneficial Ownership Information (BOI) reporting, is very simple, free to do, and can be completed online in about five minutes.
Keep reading for answers to common questions about BOI reporting. If you have more questions, make an appointment with a business advisor for personalized assistance.
Do I have to file?
Likely yes, but there are a few exceptions. Sole-proprietors do not need to file beneficial ownership information. Additionally, some industries and types of businesses (for example, accounting firms) do not need to file and you can click here to view the full list of exemptions.
What is a beneficial owner?
A beneficial owner is an individual who either directly or indirectly: (1) exercises substantial control over the reporting company, or (2) owns or controls at least 25% of the reporting company’s ownership interests.
We highly recommend business owners consult the Small Entity Compliance Guide provided by the Department of Treasury for more information, including examples and checklists, about determining who a business' beneficial owners are.
When do I need to file by?
A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial BOI report.
A reporting company created or registered in 2024 will have 90 calendar days to file after receiving actual or public notice that its creation or registration is effective.
A reporting company created or registered on or after January 1, 2025, will have 30 calendar days to file after receiving actual or public notice that its creation or registration is effective.
We recommend filing sooner rather than later, as the process is easy and there are penalties for missing deadlines.
What do I need in order to file?
First, you'll need to determine who your company's beneficial owners are. Next, you'll need each beneficial owner's name, address, and a copy of their state-issued ID or passport. Lastly, you'll need some basic information about your company including its legal name, EIN, and address.
Where do I file?
Business owners should utilize the e-filing system at BOIReporting.FinCen.gov.
What if I have more questions or need additional help?
Our team of business advisors is happy to help. You can make an appointment with an advisor for no-cost assistance by visiting the Pace SBDC's eCenter page and creating an account.