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Understanding the Impact of New Federal Reporting Requirements for Business Owners

New Beneficial Ownership Information Reporting for Businesses

What is Beneficial Ownership Information Reporting?

Beneficial Ownership Information (BOI) reporting is a new regulatory requirement that requires certain businesses to disclose information about their beneficial owners. Beneficial owners are individuals who own or control a company, directly or indirectly, or benefit from the company’s activities.


Why is BOI Reporting Important?

  1. Transparency: BOI reporting increases corporate transparency and accountability by revealing who actually owns and controls businesses.

  2. Combatting Financial Crime: It helps combat money laundering, terrorist financing, and other financial crimes by making it easier for authorities to trace the source and use of funds.

  3. International Compliance: The reporting aligns with international standards and commitments, such as the Financial Action Task Force (FATF) recommendations.


Who Does BOI Reporting Apply To?

BOI reporting typically applies to corporations, limited liability companies (LLCs), and similar entities formed or registered to do business in the jurisdiction. Financial Crimes Enforcement Network (FinCEN) provides a list of 23 exemptions including publicly traded companies, not-for-profits, and certain large operating companies.


What Information Must Be Reported?

  • Personal Details: Name, date of birth, and address of beneficial owners.

  • Ownership Details: Nature and extent of the beneficial owner's ownership or control over the entity.

  • Identification Numbers: Such as a Social Security number (SSN) or other taxpayer identification number (TIN).


How Does BOI Reporting Work?

  1. Initial Filing for New Businesses:

    1. Deadline: Newly created entities must submit the initial report within 30 days of formation or registration with the appropriate jurisdiction.

  2. Initial Filing for Existing Businesses:

    1. Deadline: Entities created before January 1, 2024, must submit an initial report on or before January 1, 2025.

  3. Updates:

    1. Deadline: If any information changes (e.g., a new beneficial owner is added), the entity must update the report within 30 days of the change.

  4. Record-Keeping:

    1. Businesses should maintain accurate records to support the information reported and be prepared for potential audits or inspections.


Compliance and Penalties

Failing to comply with BOI reporting requirements can result in substantial penalties, including fines and potential criminal charges. It is essential for businesses to understand and adhere to these requirements.


How to Prepare for BOI Reporting

  • Review Regulations: Understand the specific regulations in your jurisdiction.

  • Identify Beneficial Owners: Determine who qualifies as a beneficial owner of your business.

  • Collect Information: Gather the necessary information for each beneficial owner.

  • Implement Record-Keeping: Establish systems to track and update beneficial ownership information.

  • Seek Legal Advice: Consult with legal professionals to ensure compliance with BOI regulations.


Contact The Gil Law Group

For expert legal assistance with BOI reporting, you can rely on The Gil Law Group. Our team of experienced attorneys can guide you through the reporting process, ensuring compliance and providing tailored advice for your business. Reach out to The Gil Law Group for support with your BOI reporting needs.


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