Are you a business owner looking to add another task to your never-ending to-do list? Of course, you aren’t. As of January 1st, 2024, FinCEN began requiring reports from many companies; with minimal exceptions [and a huge penalty if you fail to comply]. I hate to be the bearer of bad news! I hope that reading more will help save you from that trouble! To keep it short and to the point – 99% of all businesses and LLC operators will be required to file with FinCEN – or the Crimes Enforcement Network. 

After many delays, on January 1st, 2024, the Corporate Transparency Act (CTA) implemented its first stage of federal filing requirements. Fortunately for you, it is quick and easy to complete! The sole purpose of this is to prevent money laundering, tax evasion, and other illegal activities. Like most laws, this also causes a major inconvenience for most people just to catch the few bad apples out there. 

Surprisingly, banks have been participating in something similar for many years. Of course, there are few exceptions allowing businesses to be exempt.

• Sole proprietors who have not yet created an entity with the Secretary of State
• Large businesses with 20+ full-time employees and $5 million recorded for the previous year’s tax return
• Businesses such as banks and insurance companies that the government heavily regulates
• Nonprofit businesses
• Others included in the Exemption Table [FAQ Page C.2.]

The CTA hopes by doing this, they can compile a government database that stores the contact information of the “beneficial owners”, or those who have substantial control of a business entity. While this process is mostly simple, it can get complicated when a more complex ownership is involved. For example, an LLC with three members where each member owns ⅓ of the business, technically has three “beneficial owners”.

Forming a new LLC or corporation in 2024 requires you to file the beneficial owner information to the Department of the Treasury’s FinCEN within 90 days. 

The following must be contained in the report [for each beneficial owner]:

• Full legal name
• Date of birth
• Complete and current residential street address
• A unique identifying number [from a state/local ID, driver’s license, or current passport]
• An image of the document containing the unique identifying number

You must also provide similar information for those who filed the documents to form the entity. This could be an article of incorporation or articles of organization for the LLC.

This information will be filed online within a new federal database called the Beneficial Ownership Secure System, or BOSS.  Filing opened on January 1st, 2024. There are no filing fees, and the information is not available to the public. The information contained in the database is strictly accessible only by law enforcement, the IRS, and other appropriate government agencies.

This is a reminder that reporting within the BOSS system is SEPARATE from local and state filing. Be sure to add this to your list of to-dos for your business; failure to comply with these requirements can cost you $500 per day; up to $10,000 total. 

A few more important things to note:

• Unfortunately, rental properties held within an LLC must also comply/ file within the system.
• You are deemed a “beneficial owner” if you own 25% of a reporting company. Therefore, the required information must be filed [excluding minors].
• Businesses formed in 2024 have 90 days after the company formation to comply and file.
• Businesses that existed BEFORE 2024 have 1 year to comply and file.
• Compliance is very simple unless the “beneficial owner” changes – in which case you have 30 days to file an update.

There are two ways to submit your filing to FinCEN:

1. Print and fill out a PDF document to upload.
2. Complete an online form.

The filing deadline is January 1, 2025, for companies created or registered before January 1, 2024. 

Companies created or registered after January 1, 2024, and before January 1, 2025, will have 90 days after receiving notice of company creation.

If you have multiple businesses to register, you may consider creating a FinCED ID for the process to work more efficiently. Otherwise, it is not necessary. For states that have many hoops to jump, such as Arizona, New York State, and Pennsylvania – we use a company called CorpNet.

Links associated with BOI Filing are listed below:

FinCEN Beneficial Ownership Information: Beneficial Ownership Information Reporting | FinCEN.gov

BOI E-Filing System: BOI E-FILING (fincen.gov)

BOI Filing PDF Document: BOIR.pdf (SECURED) (wcginc.com)

CorpNet BOI Filing: Beneficial Ownership Information Reporting is Easy With CorpNet

CorpNet BOI Reporting Fact Sheet: BOI-Reporting-Fact-Sheet.pdf (corpnet.com)

BOI Frequently Asked Questions: Beneficial Ownership Information | FinCEN.gov