December 26, 2023
If you are a business owner or planning to become a business owner in this country – there is a major change coming on January 1st that you need to know about. And you’re going to need to act right after the first of the year.
Every business whether it’s a CCorp, SCorp, LLC or any type of business entity that is created through a Secretary of State must now file what’s called “beneficial ownership information” to the Department of the Treasury’s Financial Crimes Enforcement Network or FinCEN. This also includes foreign companies that do business in the United States.
This video is going to tell you all about how to file, when to file and why you have to file. So let’s start with that – why is this happening?
Well – Congress. Back in 2021 both Democrats and Republicans passed the Corporate Transparency Act. The law created this Beneficial Ownership Information – or BOI requirement to help the US government track down people who are trying to hide or benefit from shell companies or other opaque ownership business structures. BOI information will include identifying information about the individuals who directly or indirectly own or control a company. So, how will you determine who that is? Well – for most small businesses it’ll be pretty obvious, but for bigger companies, FinCEN says the name included in the BOI will be the individual who either directly or indirectly exercises substantial control over the reporting company or who owns or controls at least 25% of the reporting company’s ownership interest. The reporting company will have to report the company’s legal name, any type of “doing business as” name or DBA, current street address of principal place of business, the jurisdiction where the company was formed or registered, and its taxpayer identification number. Then you’ll also have to report the beneficial owner’s name, birthday, residential address and upload an image of your passport or driver’s license.
So when will business owners have to file this BOI? If you have an existing company or LLC that’s already been in operation, doing business and registered with your state – you can file starting January 1st of 2024 and you will have one year to complete the BOI. If you are planning to open a business after January 1 2024, you will have 90 calendar days from the time you receive notice from your Secretary of State that your business has been registered to complete your BOI. And if you plan on creating a business after January 1 2025, you will have 30 calendar days to file your BOI.
Now – it is important to understand – filing this information will be free. So don’t feel like you have to pay someone to do this for you. The treasury department expects many if not most will be able to file this BOI on their own. But if you have a complicated business structure you may want to consult with a lawyer or accountant.
Now – you may be wondering – who will have access to this BOI information? Well, the government is finalizing those details now – but for sure – the federal government state and local governments and tribal officials. But also in some cases – American financial institutions as well as certain foreign officials in law enforcement and national security will have access to this information.
Read more about the BOI from FinCEN here.
