BOI Reporting Requirement
The BOI requirement, introduced by the Corporate Transparency Act (CTA), is intended to promote transparency and prevent illicit activities. It applies to many small businesses, and as a business owner, you may need to report specific information regarding individuals with significant control or ownership in your company.
Here’s a brief overview of what you need to know about the BOI requirement:
Who Needs to File: Most LLCs, corporations, and other entities created in the U.S. or registered to do business here are required to file, unless specifically exempt. This filing is necessary even if your LLC is a single-member entity. C Corp if it is privately held and not publicly traded, most S- Corps. You do not need to do this is you are a sole proprietor or a general partnership.
What Information Is Required: You will need to provide details on individuals with substantial control over the business or who own at least 25% of it. This includes information like full legal name, date of birth, residential address, and a unique identifying number (such as a driver’s license or passport number).
Tips:
- Business will need their exact name of the legal entity and their EIN (or SSN/ITIN) to add the company info. (**TIP do not include a hyphen in the EIN or SSN)
- The “Reporting Company Applicant” is a bit confusing. After some digging we figured out that:
- Existing companies (created before January 1, 2024) DO NOT HAVE TO REPORT THEIR COMPANY APPLICANTS
- New Companies (created after January 1, 2024) have to report WHO FILED THEIR FORMATION PAPERWORK WITH THE SECREARY OF STATE (or similar entity in another state)
- The company application is an INDIVIDUAL and must provide identification (Driver’s License, Passport, etc) or can provide a FINCEN ID number.
- Must include the person who directly filed the documents AND if someone directed documents to be filed.
Where and How to File: Filings must be submitted electronically to the Financial Crimes Enforcement Network (FinCEN), the department responsible for BOI reporting. Instructions and filing portals will be available on the FinCEN website – www.fincen.gov/boi
Tips:
- The webpage contains guidance documents, answers to frequently asked questions, introductory videos, quick reference guides, and other resources for small businesses to help them understand the requirement to report beneficial ownership information to FinCEN.
- There is also a compliance Guide on this website
Deadlines: For businesses formed on or after January 1, 2024, BOI reporting is due within 30 days of formation. Existing entities have until January 1, 2025, to comply. It’s important to adhere to these deadlines to avoid potential penalties.
I hope this information is helpful. Remember we are here to help with any questions.
Thank you
Kelly
Kelly Prickett
Director, Entrepreneurship and Economic Development Initiatives
America's SBDC - Iowa
Regional Entrepreneurship Center
Indian Hills Community College
15330 Truman St., Ottumwa, IA 52501
Phone: (641) 683-5188 or (800) 726-2585, ext. 5188
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