New BOI Reporting Requirements
The Corporate Transparency Act (CTA) introduced new Beneficial Ownership Information (BOI) reporting requirements, effective January 1, 2024. The US Congress passed the CTA with a veto proof majority in the house and senate in January 2021. The stated purpose of this legislation is to provide the Federal Government with information that will help them fight money laundering. (It is our opinion that this data will be of little or no use for such purposes because people who are using a business for money laundering are unlikely to voluntarily file a BOI.)
Penalties for non-compliance are significant and include fines of up to $591 per DAY and up to two years in prison.
Who must file a BOI report:
A corporation, limited liability company (LLC), or other entity
Created or registered to do business in the United States
Not exempt under specific criteria listed below
Exempt From BOI Reporting
Certain entities are exempt, including:
Tax-exempt organizations
Banks and credit unions
Large operating companies who meet all three of the following:
Over 20 full-time US employees
Physical US office, and
Over $5,000,000 in US-sourced gross receipts)
BOI Filing Package
Cunningham CPA PC can prepare and file your BOI report. To engage our services please download our BOI package here:
Filing Deadlines:
Existing companies (created/registered before 2024): File by January 1, 2025
Companies created/registered in 2024: File within 90 days of creation/registration
Companies created/registered from 2025 onward: File within 30 days of creation/registration.
Required Information:
BOI reports must include details about the Company, the Company's beneficial owners and, for entities formed after 2023, company applicants (the persons who filed papers with the State to create the company). Required information for individuals who directly or indirectly own 25% of a reporting company, or who exercise significant control (as a manager or officer) of a reporting company includes:
Full legal name
Date of birth
Current address (generally the residential street address is required)
Unique identification number (e.g., passport or driver's license number)
An image of the identification document (photocopy for photograph)
FinCEN Identification Numbers:
Both individuals and entities can request a FINCIN ID. This can simplify reporting process for companies with frequent changes, and individuals involved with multiple reporting companies. Establishing a FINCEN identification number may also improve privacy and security because personal information is collected and submitted only once (until an update is needed). Reporting entities are also eligible for a FinCEN ID.
Frequency of Filing
There is no annual filing requirement. However, the originally filed BOI must be updated when any of the information changes for either the entity or the connected individual. For example, if a new officer is appointed, or their address changes.
How to File
Reporting entities may self-file BOI reports electronically through FinCEN's e-filing portal at https://boiefiling.fincen.gov/. There is no fee for self-filing.
BOI Filing Package
Cunningham CPA PC can prepare and file your BOI report. To engage our services please download our BOI package here:
For more information on BOI reporting requirements
Visit FinCEN's website: https://www.fincen.gov/boi. We are here to support you in navigating these new requirements. Please let us know if you have any questions.
Please note that while we can assist with the preparation and filing of BOI reports, we cannot provide legal advice regarding CTA compliance. For legal matters, we recommend consulting with an attorney.
Frequently Asked Questions
What about entities owned by another entity or entities?
An entity cannot be considered a beneficial owner. Only individuals can be beneficial owners for BOI reporting purposes. In such situations the owner(s) of the parent must be reported.
What about non-owners (or less than 25% owners) who exercise substantial control?
Even if a company is wholly owned by another entity, individuals who exercise substantial control over the reporting company (such as officers) must still be reported as beneficial owners unless an exemption applies for the company.
Do subsidiaries need to file a BOI report?
Companies that are subsidiaries of other entities are generally required to file Beneficial Ownership Information (BOI) reports unless they qualify for an exemption or are owned only by exempt owners. If the parent company is not exempt from BOI reporting, the wholly owned subsidiary would likely need to file a BOI report and identify the individuals who are beneficial owners of the parent company (i.e., those who own 25% or more of the parent or exercise substantial control over it) as well as control persons.
Does BOI apply to foreign companies and individuals?
Yes, unless an exemption applies, foreign companies registered to conduct business in the USA are subject to BOI reporting as are their foreign beneficial owners and control persons.
Does BOI apply to my LLC even if it has no revenue and is not conducting business?
Yes.
What if the ownership is indirect?
If an individual owns or controls more than 25% of a reporting company's ownership interests through another entity or entities, the reporting company must report that individual's information.
Are trusts subject to BOI reporting?
Generally, no, however some states require trusts to be formed by filing with the Secretary of State. Trusts formed in this fashion appear to be subject to BOI reporting.
Are natural partnerships that never registered with any State required to report?
Generally, no. Only entities formed by filing with a State are covered.