New Federal Reporting Requirements for Beneficial Ownership Information (BOI)
In 2021, Congress enacted the Corporate Transparency Act as part of the U.S. government's initiatives to enhance transparency and accountability in corporate ownership. Commencing January 1, 2024, numerous companies, referred to as reporting companies, in the United States will be mandated to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).
Who are Beneficial Owners?
Beneficial owners are individuals who ultimately own or control the company. This includes people who own 25 percent or more of the business or have substantial authority in the business, for example, corporate officers.
Reporting Company Definition:
Reporting companies are any business entity that is created by filing documents with a state secretary of state. This includes corporations and LLCs. FinCEN has provided a list of exceptions to reporting requirements including tax-exempt entities and large operating companies (more than 20 full-time employees and more than $5 million in gross receipts or sales).
Beneficial ownership information reports will require the following information from the beneficial owners: name, birthdate, address, and unique ID number (i.e. driver’s license).
Any reporting company that is in operation prior to January 1, 2024 must file the BOI report before January 1, 2025, and any reporting company formed on or after January 1, 2024 must file the BOI report within 90 days.
As of the publication of this newsletter, the BOI report form has not been created by FinCEN, and they will not accept any reports prior to January 1, 2024.
We will assist you with your BOI filing requirements. Please free to contact ECS Financial Services if you have any questions.
About the Author - Mark Neeb, Manager, CPA, ECS Financial Services, joined the firm in 2014 and has over 20 years of experience in public accounting. Mr. Neeb's areas of expertise include business and individual income tax, tax planning, real estate accounting, as well as review and compilation engagements, and financial statement preparation. Mr. Neeb is a licensed CPA in the state of Illinois and holds a Master of Science in Taxation degree from DePaul University, and a Bachelor of Business Administration degree from the University of Wisconsin - Eau Claire.
