If you are a business owner in the United States, you may have heard of the BOI Reporting Rule, which is a new regulation issued by the Financial Crimes Enforcement Network (FinCEN) that requires certain corporations, limited liability companies, and other similar entities to report information about their beneficial owners to FinCEN.
But what is a beneficial owner? And what happens when the reported information changes? Do you have to update your BOI report?
Below, we will answer these questions.
What is a Beneficial Owner?
A beneficial owner is an individual who directly or indirectly owns or controls at least 25% of the ownership interests of a reporting company or exercises substantial control over it.
A reporting company is any corporation, limited liability company, or other similar entity that is created or registered to do business in the United States, unless it qualifies for an exemption.
The BOI Reporting Rule requires reporting companies to file reports with FinCEN that identify two categories of individuals: (1) the beneficial owners of the entity; and (2) the company applicants of the entity. A company applicant is any individual who files an application to form or register a reporting company.
BOI reports must include the following information for each individual: full legal name, date of birth, current address, and a unique identifying number from a valid identification document, such as a passport or driver’s license.
When is the BOI Report Due?
The BOI Reporting Rule became effective on January 1, 2024. Reporting companies that were in existence before that date have until December 31, 2024, to file their initial BOI reports. Reporting companies that are formed or registered after January 1, 2024, must file their initial BOI reports within 90 days of their creation or registration.
How Do You File a BOI Report?
To file a BOI report, you need to use the BOI E-Filing System, which is an online platform that allows you to submit and manage your BOI reports electronically. You need to create an account and provide some basic information about your company, such as its name, address, and jurisdiction of formation.
You also need to upload a copy of an identification document of each beneficial owner and applicant of your entity, such as a passport, driver’s license, or ID card.
Filing a BOI report may pose some challenges for foreign-owned or controlled entities, especially if they have complex ownership structures or operate in multiple jurisdictions.
What Happens When the Reported Information Changes?
Reporting companies must file updated BOI reports within 30 days of any change in the reported information. This means that if any of the beneficial owners or company applicants of a reporting company changes their name, address, ownership interest, or control over the entity, the reporting company must notify FinCEN and provide the updated information.
For example, if a beneficial owner sells their shares to another person, or if a company applicant moves to a different address, the reporting company must file an updated BOI report.
Failure to comply with the BOI Reporting Rule may result in civil and criminal penalties, including fines and even imprisonment. Therefore, it is crucial for reporting companies to keep track of any changes in their beneficial ownership or company applicant information and to file accurate and timely BOI reports with FinCEN.
We Can Help You Comply with the BOI Reporting Rule
If you are not sure whether you are a reporting company or how to file a BOI report, you need professional legal assistance.
At Jurado & Associates, P.A., we have the experience and the expertise to help you comply with the BOI Reporting Rule. We are committed to your success, and we will provide you with exceptional service and outcome-focused solutions.
If you are ready to get started, you can reach us by phone at (305) 921-0976, by email at [email protected], or WhatsApp at +1 (305) 921-0976.
Do not wait any longer. The rule is in effect, and you need to comply with it as soon as possible. Let Jurado & Associates, P.A. be your trusted legal partner.