If you own or operate a business in the United States, you may have heard of the new rule that requires you to identify your company’s beneficial owners and provide certain information about them to the Financial Crimes Enforcement Network (FinCEN).
But what exactly is a beneficial owner? And what are the steps you need to take to comply with the rule and avoid penalties?
Below, we will answer these questions and provide you with some practical tips and resources to help you with FinCEN compliance.
How to Identify Your Company’s Beneficial Owners
According to FinCEN, a beneficial owner is an individual who:
- Directly or indirectly owns or controls 25% or more of the equity interests of a reporting company, or
- Exercises substantial control over the management or operations of a reporting company.
A reporting company is any corporation, limited liability company, or similar entity that is created or registered in the United States.
For example, if you own 50% of the shares of a corporation, you are a beneficial owner of that corporation. Similarly, if you are a member of a limited liability company and have the authority to make decisions on behalf of the company, you are also a beneficial owner of that company.
Why You Need to Identify Your Company’s Beneficial Owners
The main reason why you need to identify your company’s beneficial owners and provide information about them to FinCEN is that it will help enhance the transparency and integrity of the U.S. financial system.
By providing FinCEN with the required information about the individuals who control reporting companies, you are helping the government combat money laundering, terrorism financing, tax evasion, and other crimes that threaten the national security and the economy of the United States.
What Happens if a Company Does Not File a BOI Report?
Failure to file a beneficial ownership information (BOI) report, or filing a false or incomplete report, can result in civil and criminal penalties, including fines of up to $500 per day and imprisonment of up to two years. Therefore, it is crucial that you identify your company’s beneficial owners accurately and file your BOI report in a timely manner.
When and How to File Your Initial BOI Report
You can file your initial BOI report using the BOI E-Filing System, which is a secure and user-friendly online platform that allows you to submit, update, and correct your BOI reports electronically. You can also create a FinCEN ID.
The deadline for filing your initial BOI report depends on when your company was created or registered.
- If your company was in existence as of December 31, 2023, you have until January 1, 2025, to file your initial BOI report.
- If your company was created or registered on or after January 1, 2024, you have to file your initial BOI report within 90 days of receiving notice of your company’s creation or registration.
You also have to update your BOI report no later than 30 days after any change in the information you previously reported. You can update or correct your BOI report using the same BOI E-Filing System.
We Can Help You with FinCEN Compliance
We understand that identifying your company’s beneficial owners and filing a BOI report with FinCEN can be challenging and time-consuming, especially if your company has a complex ownership structure.
That is why we are here to help you.
At Jurado & Associates, P.A., we are committed to providing you with high-quality and personalized legal services, and we have the expertise and experience to assist you with all aspects of the BOI reporting rule, including:
- Determining if your company is subject to the rule or if it qualifies for any exemption
- Identifying your company’s beneficial owners and verifying their information
- Preparing and filing your BOI report with FinCEN
If you are interested in our services, or if you have any questions, do not hesitate to contact us. You can reach us by phone at (305) 921-0976, by email at [email protected], or by WhatsApp at +1 (305) 921-0976.