In 2024, a new reporting requirement went into effect through the Corporate Transparency Act. All domestic and foreign entities, including corporations and limited liability companies (LLCs) that have filed formation or registration documents with any U.S. state, are required to report Beneficial Ownership Information (BOI), unless specifically exempted. While your business may not be physically operating in the U.S., it may still need to fulfill this reporting requirement.
Exempted businesses include publicly traded companies and “large operating entities”, defined as companies with more than 20 employees and with gross revenues over $5 million.
The BOI filing will be made directly and electronically with the U.S. Department of the Treasury Financial Crimes Enforcement Network (FINCEN). New entities created or registered after December 31, 2023 must file within 90 days of creation or registration in 2024 only. Existing entities created or registered before January 1, 2024 must file by January 1, 2025.
The information to be reported includes the full legal name of the reporting company and any trade or DBA names, business address, state of formation or registration, and taxpayer identification number. In addition, each reporting company must report for its beneficial owners their name, birthday, and address, and submit an acceptable form of identification such as a driver’s license or passport.
A beneficial owner is defined as any individual who owns at least 25 percent of the reporting company or exercises substantial control over the reporting company (for example, a non-owner President or CEO).
For more details, please visit FINCEN’s website at www.fincen.gov/boi. As always, planning ahead and establishing a cross-border team of experts can help you comply with and understand your corporate governance reporting obligations.
Information for this blog was provided by the team at Tronconi Segarra and Associates LLP. They can be reached at cpowell@tsacpa.com.