Mar 25 / Phil Gaudiano, CPA

New Beneficial Ownership Reporting Requirements

Introduction
The Financial Crimes Enforcement Network (FinCEN) has recently introduced new reporting requirements for Beneficial Ownership Information (BOI), likely affecting nearly every business in the United States. These changes have raised many questions and concerns among business owners, who now must understand and comply with the updated regulations. In this blog post, we will explore the new reporting requirements and provide guidance on how to navigate these changes.

Understanding Beneficial Ownership Reporting Requirements
The new BOI reporting requirements were established to enhance transparency and prevent money laundering, tax evasion, and other illicit activities. Beneficial ownership refers to individuals who own or control a company, either directly or indirectly, and hold a significant interest in the business. Under the new regulations, businesses are required to submit information about their beneficial owners to FinCEN, including:
  • Name
  • Date of birth
  • Address
  • Social Security number or another government-issued identification number
  • Percentage of ownership or control in the company

These reporting requirements apply to a broad range of business entities, such as corporations, limited liability companies, partnerships, and other similar organizations. It looks as though entities protected from state-level reporting – in places like DE and WY, for example – will need to report ownership information directly to FinCEN. In other words, just about every business in the US is likely to be affected by the new BOI reporting rules.

Navigating the New Reporting Requirements
To ensure compliance with the new BOI reporting requirements, businesses should take the following steps:
  1. Identify Beneficial Owners: Determine who in your company qualifies as a beneficial owner according to FinCEN's guidelines. Remember that both direct and indirect ownership or control need to be considered.
  2. Gather Information: Collect the required information for each beneficial owner, such as name, date of birth, address, and identification number.
  3. Submit BOI Reports: Follow FinCEN's procedures for submitting BOI reports, including using designated electronic portals or filing specific forms.
  4. Maintain Records: Keep accurate and up-to-date records of your beneficial ownership information, as you may need to update or amend your BOI reports periodically.
  5. Monitor Updates and Changes: Stay informed about any changes to the BOI reporting requirements by regularly checking the FinCEN website or consulting with a legal or financial advisor.

Conclusion
The new Beneficial Ownership Information reporting requirements introduced by FinCEN are set to impact nearly every business in the United States. To stay compliant and avoid potential penalties, businesses must understand these requirements and take the necessary steps to identify their beneficial owners, gather relevant information, and submit timely reports to FinCEN. It is important to note that these new reporting requirements do not go into effect until early 2024, and may change between now and then. By staying informed, businesses can navigate the complexities of the new BOI reporting rules and ensure they remain on the right side of the law.