We want to keep you informed about important changes that could impact your business. Under the Corporate Transparency Act (CTA), companies are now required to disclose key information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). This reporting is essential for promoting transparency and helping combat money laundering and other illicit activities. This new FinCEN reporting requirement has a deadline of January 1, 2025, for most companies.
What is a BOI report?
A BOI report is a document that shares critical details about your company, including its legal name, employer identification number (EIN), and key information about its beneficial owners. A beneficial owner is defined as an individual who owns or controls the company, either directly or indirectly. This report requires personal information such as:
- The owner’s name
- Residential address
- Identification number (from a passport or driver’s license)
Can First American Bank file a BOI report for my company?
No. While financial institutions are required to obtain similar information to that disclosed on the BOI report, the CTA currently requires the company itself to submit the BOI report. Additionally, First American Bank cannot accept a BOI report from a company as a substitute to the Bank’s standard account opening documentation.
Who needs to file a BOI report?
BOI reporting applies primarily to domestic companies that were created by filing with the Secretary of State or a similar office. This includes:
- Corporations
- Limited Liability Companies (LLCs)
It also includes foreign companies that are registered to do business in the U.S. These are known as foreign reporting companies. However, certain companies may be exempt from this requirement. Examples of exempt entities include:
- Publicly traded companies
- Large operating companies
- Financial institutions
- Tax-exempt organizations
When are BOI reports due?
- If your company existed before 2024, your BOI report is due by January 1, 2025.
- If you established your company in 2024, your report is due within 90 days of your company’s formation.
- If you establish a new company in 2025 or later, your report is due within 30 days of your company’s formation.
Do I file a BOI report every year?
No, BOI reports are not annual. However, you must update your BOI information whenever there are changes in your company’s beneficial ownership details.
What happens if I don't file a BOI report?
It’s crucial to file your BOI report accurately and on time. Failure to comply could lead to severe penalties, including:
- Up to $591 per day for individuals, capped at $10,000
- Potential criminal fines or imprisonment for intentional false reporting or willful failure to comply
Do I still need to file when BOI reports were ruled unconstitutional?
Recently, a federal court in Alabama ruled the CTA's reporting requirement unconstitutional, but it applied only to the plaintiffs involved in that case. As of now, unless your company is part of that lawsuit or meets an exemption, you still have an obligation to file your BOI report. Companies joining the National Small Business Association after March 1, 2024, will not be exempt.
Helpful Resources from FinCEN
We encourage you to review these resources and begin preparing for your BOI report filing. For assistance, please refer to the 5-minute video at https://www.fincen.gov/boi and the helpful pages below. If you have questions about how these new regulations impact your business, we recommend reaching out to your attorney or accountant.
