As of January 1, 2024, many companies are now required to report information to the U.S. government about who ultimately owns and controls them.
The U.S. Financial Crimes Enforcement Network (FinCEN) issued a new Beneficial Owner Information (BOI) reporting rule that took effect on January 1, 2024, to help protect national security and prevent financial abuse.
Who must comply with the new rule
The rule identifies two types of reporting companies: domestic and foreign.
A domestic reporting company is a corporation, limited liability company (LLC), or any entity created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe.
A foreign reporting company is a corporation, LLC, or other entity formed under the law of a foreign country that is registered to do business in any state or tribal jurisdiction by the filing of a document with a secretary of state or any similar office.
Under the rule, and in keeping with the CTA, 23 types of entities are exempt from the definition of “reporting company.”
FinCEN expects that these definitions mean that reporting companies will include (subject to the applicability of specific exemptions) limited liability partnerships, limited liability limited partnerships, business trusts, and most limited partnerships, in addition to corporations and LLCs, because such entities are generally created by a filing with a secretary of state or similar office.
Other types of legal entities, including certain trusts, are excluded from the definitions to the extent that they are not created by the filing of a document with a secretary of state or similar office. FinCEN recognizes that in many states the creation of most trusts typically does not involve the filing of such a formation document.
When reports are due
Companies that fit the criteria must file by the following deadlines:
- Reporting companies created or registered to do business in the United States before January 1, 2024 must file by January 1, 2025.
- Reporting companies created or registered to do business in the United States in 2024 have 90 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective.
What to do next
Filing is simple, secure, and free of charge. Beneficial ownership information reporting is not an annual requirement. A report only needs to be submitted once, unless the filer needs to update or correct information.
Visit this page for more details on who will be required to submit a BOI report and how to do so.
This page also has many helpful resources for preparing and submitting reports.
For additional questions and assistance, contact our team.