The Beneficial Ownership Information (BOI) reporting requirement, introduced by FinCEN (the Treasury Department’s Financial Crimes Enforcement Network) increases transparency in business ownership with the stated goal of reducing financial crimes such as money laundering and tax evasion. As a business owner, it’s essential to understand what this regulation means for you and your company.

The BOIR rule mandates that certain companies report information about their beneficial owners to FinCEN. A “beneficial owner” is any individual who directly or indirectly exercises substantial control over the company or owns 25% or more of its equity

Corporations, limited liability companies (LLCs), and similar entities created or registered by a state to do business in the United States are required to file their BOI Report. Larger companies, regulated financial institutions, and inactive companies, are exempt because they largely already have to conduct this disclosure.

Businesses must report identifying information about each beneficial owner, including:

• Full legal name
• Date of birth
• Current residential or business address
• A unique identification number from a government-issued document (such as a driver’s license or passport)

The BOIR requirement officially went into effect in January 2024, and new companies must file within 90 days after their formation. Existing companies have until the end of 2024 to comply, so it’s essential to immediately start gathering the necessary information. Compliance with FinCEN’s BOIR requirement is a crucial regulatory obligation so take the time to understand these requirements and prepare your business for the upcoming changes.