Beneficial Ownership Information (“BOI”) reporting is a new federal law requirement estimated to impact more than 30 million businesses as soon as January 1, 2024. In general, any entity, domestic or foreign, created by filing a document with a secretary of state (or equivalent state office) will be required to file a BOI report. Unlike a lot of government requirements, BOI reporting targets small businesses.
If you are a small business owner, there is a likelihood that your business is subject to BOI reporting. BOI reports will not be filed with the IRS, but with the Financial Crimes Enforcement Network (FinCEN), another agency of the Department of Treasury. Penalties for willful noncompliance may result in criminal and civil penalties of $500 per day and up to $10,000 with up to two years of jail time. That’s why we care.
Entities subject to BOI reporting requirements, called “reporting companies,” must file reports identifying (1) the beneficial owners of the entity, and, in some instances, (2) the individuals who have applied with specified governmental authorities to form the entity or register it to do business (“company applicants”).
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