What is a Beneficial Ownership Information (BOI) report?
A Beneficial Ownership Information (BOI) report is a regulatory filing that provides detailed information about the individuals who own, control, or benefit from an entity. The purpose of the BOI report is to enhance transparency in financial and business transactions, aiding in the prevention of illicit activities such as money laundering, terrorist financing, and other financial crimes. The BOI report is mandated by the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.
Key Components of a BOI Report:
Beneficial Owner Identification:
Full Legal Name: The complete legal name of each beneficial owner as it appears on official identification documents.
Date of Birth: The date of birth of each beneficial owner.
Residential or Business Address: The current street address where each beneficial owner resides or conducts business. This must be a physical location, not a P.O. Box.
Identification Number and Document: A unique identifying number from an acceptable identification document, such as:
A valid U.S. passport.
A state-issued driver’s license or identification card.
A foreign passport if the beneficial owner is a non-U.S. citizen.
Copy of Identification Document: A scanned copy or a clear photo of the identification document provided.
Ownership and Control Information:
Percentage of Ownership: The exact percentage of ownership interest each beneficial owner holds in the entity.
Nature of Ownership or Control: A detailed description of the nature of ownership or control held by each beneficial owner, including:
Direct Ownership: Ownership of shares, equity, or voting rights.
Indirect Ownership: Ownership through another entity or structure that holds shares or equity in the reporting entity.
Control Positions: Roles such as senior officers (CEO, CFO, etc.), directors, or any other position with significant influence over the entity’s operations and decisions.
Entity Information:
Legal Entity Name: The full legal name of the entity submitting the BOI report.
Entity Type: The type of legal entity (e.g., corporation, LLC, partnership).
Formation Details: The state or jurisdiction where the entity was formed or registered, and the date of formation.
Principal Address: The primary business address of the entity.
Purpose and Importance of the BOI Report:
Enhancing Transparency:
The BOI report aims to create transparency in business and financial dealings by identifying individuals who own or control entities. This transparency helps prevent the misuse of corporate structures for illicit activities.
Combating Financial Crimes:
By requiring entities to disclose their beneficial owners, the BOI report helps regulatory authorities and law enforcement agencies detect and combat financial crimes, including money laundering, terrorist financing, and tax evasion.
Regulatory Compliance:
Filing a BOI report ensures that entities comply with FinCEN regulations and avoid penalties for non-compliance. This is essential for maintaining good standing with regulatory authorities and fostering trust with business partners and financial institutions.
Who Must File a BOI Report:
Domestic Reporting Companies:
Corporations, LLCs, or other entities created by the filing of a document with a Secretary of State or similar office under the laws of a state or Indian Tribe.
Foreign Reporting Companies:
Corporations, LLCs, or other entities formed under the laws of a foreign country and registered to do business in the U.S. by filing a document with a Secretary of State or similar office under the laws of a state or Indian Tribe.
Filing and Update Requirements:
Initial Filing:
New entities must file their BOI report within 30 days of formation or registration.
Existing entities must file their initial BOI report by January 1, 2025.
Updates:
Entities must update their BOI report within 30 days of any change in beneficial ownership information, such as changes in ownership percentages, control, or personal details of beneficial owners.
Corrections:
If an entity discovers that any previously submitted BOI information was inaccurate or incomplete, it must file a corrected report within 30 days of discovering the inaccuracy.
Penalties for Non-Compliance:
Failure to file the initial BOI report, updates, or corrections within the required timeframes can result in significant penalties, including civil fines and potential criminal charges for willful non-compliance.
Our Services:
Our firm provides comprehensive BOI reporting services to help you navigate these requirements and ensure compliance. We assist with data collection, report preparation, submission, and ongoing updates, ensuring your entity meets all regulatory obligations.