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FinCEN BOI Letter to Clients

Understanding FinCEN’s BOI Reporting Requirements

Dear Valued Client,

Effective January 1, 2024, all formed Limited Liability Companies (LLC), Corporations, Limited Partnerships, and other companies that file formation papers with their state’s Secretary of State department must file a report with the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) providing specified information regarding the companies “beneficial owners”- the individuals who ultimately own or control the company. This concept is to create a national database of all beneficial owners of all US and non-US companies doing business in the US. The enforcement of the law and regulations will be handled by the Financial Crimes Enforcement Network (FinCEN). 

Most companies must file these reports by January 1, 2025. However, companies formed in 2024 will have 30 days from the entity’s formation/registration to file these reports. Although there is a proposal to extend this to 90 days for companies formed in 2024 only. For companies formed before January 1, 2024, similar information will need to be filed. However, older companies have until December 31, 2025, to file this information. 

Should any of the reported information change or a beneficial ownership interest be sold or transferred, the entity must fill out an updated BOI report within 30 days of the change. Changes are listed below. Do so by visiting their website fincen.gov/boi

Beneficial ownership information is not an annual requirement unless a company needs to update or correct information. This process is only done once. Please refer to fincen.gov/boi for any exemption questions. There are no fees for this process. 

This is part of the federal government’s anti-money laundering and anti-tax evasion efforts. There will be violations for those who do not comply with reporting the required information to FinCEN and those who do not timely update any changed information can result in significant fines. These penalties can be imposed against the beneficial owner, the entity, and/or the person completing the report. 

Penalties/fines could result in but not limited to:

  • civil penalties of up to $500 for each day that the violation continues.
  • be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000.

Potential violations include:

  • willfully failing to file a beneficial ownership information report.
  • willfully filing false beneficial ownership information.
  • willfully failing to correct or update previously reported beneficial ownership information.

 

Frequently Asked Questions:

 

How and when to report your company:

This is done electronically through FinCEN’s website: fincen.gov/boi. Once completed the system will send you a receipt of completion. 

  • If your company was created or registered before January 1, 2024, you will have until January 1, 2025, to report BOI.
  • If your company is created or registered in 2024, you must report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.
  • If your company is created or registered on or after January 1, 2025, you must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
  • Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 days.

Information that is required for this process includes:

Reporting Company:

    • Legal name
    • Any trade names – DBA or TA’s
    • Current address (the reporting company address must be a U.S. Street address and cannot be a P.O. box.)
    • City, State, County of formation or registration
    • Taxpayer Identification Number

Beneficial Owner:

    • Legal name
    • Date of birth
    • Residential address: and
    • Identifier number from an acceptable identification (unexpired passport or US Driver’s license number) and an image of this document

Updating the FinCEN report:

If there is any change to the required information about your company or its beneficial owners that your company filed previously, your company must file an updated report no later than 30 days after the date of the change. Do this by going to the website fincen.gov/boi 

These changes can include but not limited to:

  • Any change to the information reported for the reporting company, such as registering a new business name.
  • A change in beneficial owners, such as a new CEO, or a sale that changes who meets the ownership interest threshold of 25 percent.
  • Any change to a beneficial owner’s name, address, or unique identifying number previously provided to FinCEN. If a beneficial owner obtained a new driver’s license or other identifying document that includes a changed name, address, or identifying number, the reporting company also would have to file an updated beneficial ownership information report with FinCEN, including an image of the new identifying document.

The website to register and report can be found at fincen.gov/boi

Assisting you with your compliance with the Corporate Transparency Act (CTA), including the Beneficial Ownership Information (BOI) reporting is NOT within our scope of engagement. You have sole responsibility for your compliance with the CTA and the required BOI reporting. We have no liability resulting from your failure to comply with the CTA.

For any questions or legal advice please contact your attorney. If you do not have a legal professional, we would be happy to recommend a few. We will NOT be able to answer any questions regarding CTA or the BOI because we are not attorneys. 

Again, you can visit their website at fincen.gov/boi. 

 

Sincerely,

Ron Johnston and Associates

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