The Beneficial Ownership Information Report is a critical component of FinCEN's broader strategy to enhance transparency in corporate structures. Under the Corporate Transparency Act (CTA), which was enacted in January 2021, certain entities are required to disclose their beneficial owners and company applicants. 

A beneficial owner is an individual who directly or indirectly:

• Exercises substantial control over a reporting company

• Owns or controls at least 25% of a company's ownership interest

A company created or registered on or after January 1, 2024 must report their company applicants, up to two individuals who:

• Directly files the documents that creates or registers the company

• If more than one person is involved in the filing, the individual who is primarily responsible for directing or controlling the filing

There is no annual reporting requirement or filing fee when submitting beneficial ownership information report to FinCEN.

Key Objectives of the BOI Report

1. Enhancing Transparency: The BOI Report is designed to provide greater transparency into who owns and controls companies operating in the U.S. This is particularly important in a global environment where shell companies can be used to obscure ownership and facilitate illicit activities.

2. Combating Financial Crimes: By requiring companies to disclose their beneficial owners, FinCEN aims to make it more difficult for criminals to hide their identities and engage in illegal activities. This increased transparency can help law enforcement agencies track and prosecute financial crimes more effectively.

3. Facilitating Compliance: The BOI Report will also assist financial institutions in complying with their own due diligence and reporting obligations. By understanding the true ownership of entities, banks and other financial services can better assess risk.

Who Must File?

The BOI Report applies to various types of entities, including corporations, limited liability companies (LLCs), and other similar organizations formed under state or tribal law. The two types of reporting companies are domestic reporting companies created by the filing of a document with the secretary of state or similar office in the United States and foreign reporting companies formed under the law of a foreign country but registered to do business in the U.S. by fling a document with the secretary of state or similar office. 

Information Required in the Report

Depending on when a company was created or registered will determine what information needs to be reported. 

• Company created or registered ON OR AFTER January 1, 2024, will need to report information about itself, beneficial owners and company applicants

• Company created or registered BEFORE January 1, 2024, will need to report information about itself and beneficial owners

Companies must report the following information about itself:

• Legal Name

• Any trading names, “doing business as” (d/b/a), or “trading as” (t/a) names

• Current address of its principal place of business in the United States

• Address must be a U.S. street address and cannot be a P.O. box

• Jurisdiction of formation or registration

• Taxpayer Identification Number

• Indicate if it is filing an initial report, or correction or update

Companies required to file a BOI Report must provide the following information about each beneficial owner or company applicant:

• Full legal name

• Date of birth

• Residential or business address

• A unique identifying number from an acceptable non-expired identification document (such as a driver's license or passport)

Filing Timeline and Compliance

FinCEN has set specific deadlines for filing the BOI Report. These deadlines are :

• Companies created or registered BEFORE January 1, 2024 have until January 1, 2025

• Companies registered IN 2024 have 90 calendar days after receiving actual or public notice of it's creation or registration is effective

• Companies created or registered ON OR AFTER January 1, 2025 have 30 calendar days after receiving actual or public notice that its creation or registration is effective

Any change must be reported no later than 30 days after the date of the change. Examples of changes that would require an update are:

• Registering a new business name

• Change in beneficial owners

• Change to beneficial owner's name, address, or unique identifying number

How to File

Beneficial Ownership Information are to be filed electronically.  

When it comes to filing BOI reports, there are a lot of deadlines to remember. If you work with a reliable tax attorney, they can keep track of those dates for you. At Gabaie & Associates, LLC, we'll ensure your tax & BOI paperwork are filed before the statutory period expires.

If you're a taxpayer in Baltimore, Columbia, Frederick, Rockville, or anywhere in Maryland or in the world, call us at (410) 358-1500 for assistance with your filing requirements. You can also fill out our online form with your information, and a member of our team will get back to you.