From January 1st, 2024, any new company (exemptions are listed below) will have 30 days to file their initial Beneficial Ownership information (BOI) report.

For the companies already in business before that date, the BOI has to be filed before January 1st, 2025.  Also, you should be reporting any changes in the BOI within the 30 days.

Note that the Financial Crimes Enforcement Network (FinCEN) forms and filing will be available from January 1st, 2024.

This new regulation was approved in 2021 in a bipartisan effort. The rational is to “… make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.” For some of you, the FinCEN might sound familiar as this organization is a bureau of the United States Department of Treasury and has other required forms that you might have filed in the past, such as the FBAR required if you have more than $10,000 in foreign financial institutions.

The reporting requirement listed in the FAQ – Section F are relatively straight forward for the business (information already included in the tax return), for the beneficial owner and company applicant’s  (information included in the personal tax return and added data from a form of identification)

As mentioned above, there are currently 23 exemptions which are:

1 Securities reporting issuer
2 Governmental authority
3 Bank
4 Credit union
5 Depository institution holding company
6 Money services business
7 Broker or dealer in securities
8 Securities exchange or clearing agency
9 Other Exchange Act registered entity
10 Investment company or investment adviser
11 Venture capital fund adviser
12 Insurance company
13 State-licensed insurance producer
14 Commodity Exchange Act registered entity
15 Accounting firm
16 Public utility
17 Financial market utility
18 Pooled investment vehicle
19 Tax-exempt entity
20 Entity assisting a tax-exempt entity
21 Large operating company
22 Subsidiary of certain exempt entities
23 Inactive entity

We expect that the tax preparation software companies will generate a form to file this new requirement as part of the annual tax filing (similar to the FBAR form that is part of the tax preparation software). Additionally, the businesses will be able to file this form online through the FinCEN portal even if nothing is currently available as a pilot or template (it should be available after January 1st, 2024 based on the FAQs).


Link – Small Entity Compliance Guide