Navigating Beneficial Ownership Information Reporting: A Guide for Business Owners

By: Brianna Wethal, SVP Commercial Lending Manager 

https://www.thebankofnewglarus.bank/about-us/meet-our-staff


The Bank of New Glarus – March 2024

In the always-changing regulatory landscape, business owners face a new federal reporting requirement: Beneficial Ownership Information (BOI) Reporting. Effective January 1, 2024, this obligation from an office of the US Treasury, Financial Crimes Enforcement Network (FinCEN), requires many companies to report information about who ultimately owns or controls them.

As a commercial banker, I encourage my clients to proactively address this requirement and safeguard your company’s reputation.

In this article, I will walk you through what BOI reporting entails and give you practical guidance for efficient compliance. To avoid costly penalties, you must be compliant and file a report.

What Is BOI Reporting?

The BOI reporting obligation aims to identifying the true individuals who own or control a company, and this achieves several goals:

Financial Crime Prevention: Armed with this information, regulators can better combat money laundering, fraud, and other illicit activities.

Financial System Integrity: Safeguarding the integrity of the financial system is paramount, and BOI reporting plays a vital role in achieving this.

Who Must Report?

BOI reporting applies to the many categories of companies, the most populated categories include:

  • Domestic Entities
  • Corporations
  • Limited Liability Companies (LLCs)
  • Exemptions

While most companies fall under the reporting scope, some exemptions exist. Notable exceptions include publicly traded companies, nonprofits, and specific large operating entities. To determine whether your company qualifies for an exemption, you can consult FinCEN’s Small Entity Compliance Guide.

When do I Need to Report?

Companies created or registered before January 1, 2024, will have one year (until January 1, 2025) to file their initial reports, while reporting companies created or registered after January 1, 2024, will have 30 days after receiving notice of their creation or registration to file their initial reports.

How Do I Start the Reporting Process?

Start by identifying the beneficial owners of your company. These are individuals who hold at least 25% ownership or exercise significant control. Collect relevant details such as names, addresses, and ownership percentages. Remember, accuracy matters.

Submit the Report

Filing the report is straightforward. Visit FinCEN’s secure portal and submit the required information.

There are no fees associated with BOI reporting. It’s a crucial step toward maintaining compliance and contributing to a transparent business environment.

Conclusion

Behind every company lies a network of beneficial owners. As a responsible business owner, you hold the key to unlocking transparency for your own business and making an investment in a more resilient business world.

This article is explanatory only and does not supplement or modify any obligations imposed by statue or regulation.