Beneficial Ownership Reporting Requirements

Beneficial Ownership Reporting Requirements

Starting in 2024, corporations, limited liability companies (LLCs), limited partnerships, and other entities that filed corporate formation papers with a state’s Secretary of State’s office or similar government agency must now also file a mandatory report with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial beneficial ownership report (BOI Report). A reporting company created or registered on or after January 1, 2024, will have 90 calendar days to file its initial beneficial ownership report.

There are severe penalties for not filing these mandatory reports. Any person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $591 for each day that the violation continues. A person who willfully violates the BOI reporting requirements may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.  

Beneficial owners are individuals who either directly or indirectly: (1) exercise substantial control over a reporting company, or (2) own or control at least 25% of a reporting company’s ownership interests. Because beneficial owners must be individuals, trusts, corporations, or other legal entities are not considered to be beneficial owners. However, in certain specific circumstances, information about an entity may be reported in lieu of information about a beneficial owner.  

There are 23 exemptions where companies may be exempt from filing the BOI Report. The most common exemptions are:

1.     Tax-exempt entities or companies assisting a tax-exempt entity.

2.     Large operating companies. It employs more than 20 full-time employees in the United States, has an operating presence in the United States, and filed a federal income tax return for the previous year, demonstrating more than $5,000,000 in gross receipts.

3.     Inactive entities.

Gift CPAs would be happy to file this report on your behalf. 

If you would like us to assist you, please click on the link below to complete the required documents.

  • Initial set up and filing of the Beneficial Ownership Report (up to 2 Beneficial Owner filings): $400
  • Each additional Beneficial Owner Filing: $25 each

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