top of page
  • CRCFO

What Businesses Need to Know About the New Beneficial Ownership Information (BOI) Reporting

(And Critical to Know if You Are Starting a Business)

by James Crane, CPA, Tax Services Practice Leader


What firms need to know about BOI Federal law.

Summary A new U.S. compliance law is mandatory for many businesses organized after December 31, 2023, as well as many small businesses organized in 2023 or earlier. However, businesses organized in 2024 should pay particular attention now. Any business organized in 2024 should consider the Beneficial Ownership Information (BOI) filing as one of the essential tasks directly connected to the organization of a new business. The initial BOI filing is due 90 days after the business is organized. Entities that existed before 2024 have until January 1, 2025, to complete their initial BOI filing. Noncompliance with the BOI deadlines will result in excessive penalties - up to $500 per day and possible criminal penalties.


 


The Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Treasury, may be an organization most business owners have never heard of. FinCEN recently issued a guide detailing the new BOI filing requirement. This comprehensive resource is tailored specifically for small businesses, offering insights and guidelines. We recommend you review this guide and consider the new BOI filing requirement.

Why

This law, part of the Corporate Transparency Act (CTA), aims to prevent criminals, terrorists, and others from hiding illicit money or other property in the United States.


Who Has to File

Any entity that has been formally organized in a U.S. state. (even if inactive), as well as foreign entities registered to do business in the U.S., must complete the BOI filing unless they meet an exemption as outlined below.


Who Does Not

There are 23 entity exemptions, including banks, insurance companies, 501(c) nonprofits, and firms with more than 20 full-time, U.S.-based employees that reported more than $5M in sales. Read more in the guide.


What

The Beneficial Ownership Information annual report identifies the individuals who directly or indirectly own or control a company.

When

  • Reporting companies created before December 31, 2023 have until January 1, 2025 to complete the initial BOI filing.

  • Reporting companies organized on or after January 1, 2024 must complete their initial BOI filing within 90 days after the organization date.

How

BOI reports are to be filed electronically via FinCEN's BOI E-Filing website


Resources



 

How can we support you in achieving your organization's financial sustainability and growth?


If you would like to discuss how Charles River CFO can assist your company with interim or fractional CFO Services, tax, and accounting services, please get in touch with us at (781) 431-0420 x1 or email us.

61 views

Comments


Commenting has been turned off.
bottom of page