All U.S. companies must report BOI (Business Ownership Information).

The Corporate Transparency Act (CTA) takes effect on January 1, 2024. All companies registered and operating in the U.S. must submit Beneficial Ownership Information (BOI) reports to the Financial Crimes Enforcement Network (FinCEN) to disclose direct or indirect ownership.

1. Which Companies Need to Report BOI?

Companies required to report BOI (Reporting Company) include:

• Corporations, LLCs, LLPs registered in any U.S. state

• Entity companies registered with any state's Secretary of State

• Foreign companies registered to operate in any U.S. state
  

However, some business types are exempt from this requirement:

 

2. What is a Beneficial Owner?

BOI primarily reports information about beneficial owners. A beneficial owner is an individual who meets any of the following criteria, directly or indirectly:

(i) Exercises substantial control over the company, such as the CEO, Secretary, CFO, COO, etc., regardless of ownership.

(ii) Owns or controls at least 25% of the company's ownership.

(iii) If the company's shareholders are other companies, trace ownership to the individuals who ultimately control the company.

3. Information Required for BOI Reporting

You must report information about the Reporting Company and its Beneficial Owners. For companies registered after January 1, 2024, information about the Company Applicant is also required. A Company Applicant is:

(i) The individual who directly submits the company registration documents.

(ii) The individual who primarily directs or controls the submission of the registration documents.

Typically, this is the accountant, lawyer, or key personnel responsible for company registration.

4. BOI Reporting Deadlines

BOI reporting is not required annually. After the initial report, updates are only needed within 30 days of any changes.

• Companies registered before January 1, 2024: Report by January 1, 2025.

• Companies registered between January 1, 2024, and December 31, 2024: Report within 90 days of registration.

• Companies registered after January 1, 2025: Report within 30 days of registration.

• In case of errors: Report within 30 days of discovering the error.

• Updates: Report within 30 days of any changes, such as address updates, personnel changes, or expired documents.
  

5. Penalties for Non-compliance

Penalties for late BOI reporting include:

(i) A civil penalty of USD 500 per day, with no upper limit.

(ii) A maximum criminal penalty of USD 10,000 and/or up to two years in prison.

Penalties apply not only to the company but also to any individual responsible for the non-compliance, including company executives.

If you own a U.S. company, consult a professional to ensure compliance with the specific reporting requirements applicable to your business. For any questions, feel free to contact us at PurpleANTS; we are happy to assist you.