There is a notable buzz circulating in the business world regarding the New Beneficial Ownership Information Reporting (BOI). However, for some people, it is accompanied by a sense of uncertainty.
BOI reporting refers to regulations aimed at enhancing transparency in corporate ownership by mandating that certain entities, such as Limited Liability Companies (LLCs) and Corporations disclose information about their beneficial owners to government authorities. Beneficial owners are individuals who directly or indirectly own or control a significant portion of the entity.
The goal is to prevent illicit activities such as money laundering, corruption, and terrorism financing by identifying the individuals behind corporate structures.
If you own or are involved with an LLC or Corporation, there are several reasons you should be aware of the BOI.
Failure to report accurate beneficial ownership information may result in a fine of $500 per day per entity and other enforcement actions.
Transparency in business operations helps build trust among stakeholders, customers, and the public and contributes to a fair and accountable business environment.
Identifying beneficial owners helps authorities prevent financial crimes and protect the integrity of businesses.
Understanding and complying with BOI reporting is increasingly important in the global business landscape as many countries are adopting this as part of international efforts to combat money laundering and corruption.
Companies created or registered before January 1, 2024, must file their initial BOI report by January 1, 2025. Those registered between January 1, 2024, and January 1, 2025, have 90 calendar days after creation or registration to file and those registered on or after January 1, 2025, will have 30 calendar days.
You can read the full details about the BOI and file the reports on your own at www.fincen.gov/boi. Some tax professionals can file for you for a nominal fee.