As part of the Corporate Transparency Act passed in 2021, many businesses, including LLCs and real estate holding entities, are now required to file Beneficial Ownership Information (BOI) with the Financial Crimes Enforcement Network (FinCEN).
Who Needs to File?
FinCEN estimates that approximately 32 million entities, including the most commonly held businesses, LLCs, which are formed by filing articles of organization with a state.
Examples of entities that must file include LLCs used for holding rental properties as part of an estate or asset protection strategy, professional corporations that operate dental, medical, legal, or similar practices, and corporations managing family-owned businesses (unless they qualify under the large company exemption).
Entities that are exempt from filing include nonprofits, large businesses with 20 or more employees and at least $5 million in annual revenue, and organizations already heavily regulated by the government, such as banks. Government entities, including tribal organizations and their subsidiaries, like tribally chartered corporations, are also not required to file.
What You’ll Need to File
The information you’ll be asked to provide includes the following:
Company Filing
- Full legal name (and any trade names such as DBAs) and address.
- Tax ID number
- Identifying document from an issuing jurisdiction (e.g., a certificate of incorporation) and the image of that document
Beneficial Owner Reporting
Reporting companies will also have to file reports for “beneficial owners.” This includes:
- Full legal name. (This requires the “full legal name” not initials.)
- Date of birth
- Home address (not a P.O. box or lawyer or other adviser’s address)
- PDF (photocopy) of the individual’s U.S. passport or state driver’s license
Remember that you’re sharing sensitive information, so encryption is strongly encouraged. You should also consider obtaining a FinCEN Identifier Number, as this can help with maintaining privacy and confidentiality. Once you have filed, it is encouraged to save a confirmation of the filing.
Deadline to File
The deadline to file your BOI is January 1, 2025. Additionally, any changes to your filing must be reported within 30 days.
Penalties for not filing can be severe, with civil fines of up to $591 per day (adjusted annually for inflation) and criminal penalties of up to $10,000, including imprisonment for up to two years.
Bottom line: File. There’s no penalty to over-report. It’s cheaper and easier.
Additional Resources
Please remember that this email is for informational purposes only. No legal advice is being provided. All persons should contact their attorney for BOI filing recommendations.
However, if you’d like assistance with staying on top of this requirement, we are offering a BOI Monitoring Service to ensure you don’t miss the deadline. Please reply to this email if you’d like to be added to our list, and we’ll follow up to ensure everything is handled well before the December 31st deadline.
As always, Berland Wealth Management is here to help keep your finances safe and your future secure. If you have any questions, feel free to reach out to us by CLICKING HERE.
