In 2021, Congress passed the Corporate Transparency Act, which creates a new Beneficial Ownership Information (BOI) reporting requirement. The U.S. government believes this will make it more difficult for business owners to hide any unethical gains through shell companies or other opaque ownership structures.  

A beneficial owner is an individual of a business who either exercises substantial control over the company or owns at least 25% of the company’s interest. You may ask yourself, what companies will be required to report BOI? According to the FinCEN, both domestic and foreign corporations and limited liability companies created by the filing of a document with the Secretary of State will be required to fill out BOI. Examples of these could include an LLC for a dairy farm, beef cattle farm, or produce farm and corporations for meat processing plants, fertilizer sales businesses, or on-farm creameries.  

A key item to mention is that non-profit organizations are exempt from filing a BOI report. Additionally, there are 23 entity types that are exempt from reporting BOI: securities reporting issuer, governmental authority, bank, credit union, depository institution, holding company, money services business, broker or dealer in securities, securities exchange or clearing agency, other exchange act registered entity, investment company or investment adviser, venture capital fund adviser, insurance company, state-licensed insurance producer, commodity exchange act registered entity, accounting firm, public utility, financial market utility, pooled investment vehicle, tax-exempt entity, entity assisting a tax-exempt entity, large operating company, subsidiary of certain exempt entities, inactive entity. 

A reporting company created or registered before January 1, 2024, will have until January 1, 2025, to file its initial BOI report. A reporting company created or registered in 2024 will have 90 calendar days to file its BOI report. Reporting companies created or registered after January 1, 2025, will have 30 calendar days to file their BOI report. There is no annual requirement for filling out a BOI report; however, a reporting company must update their BOI report as needed. The BOI report can be filled out through a secure filing system available on the FinCen’s BOI E-Filing Website: BOI E-FILING (fincen.gov). There is no fee for filing a BOI report.  

A reporting company must report its legal name, any trade names, street address, jurisdiction of formation, and tax ID number. The reporting company must provide the beneficial owner’s name, date of birth, residential address, and identifying number from a passport or U.S. driver’s license. This same information is required to be reported for a reporting company’s applicant. The report can be filled out electronically or in PDF. The PDF version requires a few extra steps such as downloading, editing, and uploading the document. We recommend keeping things simple and filing the electronic version if you can.  

Failure to file a BOI report, or providing false information, can result in individuals being subject to a fine of $500 per day, up to $10,000, and up to 2 years in prison. The penalty for disclosing BOI information without proper authorization is a fine of $500 per day, up to $25,000, and up to 5 years in prison. 

For more information and to file your report, visit https://www.fincen.gov/boi-faqs#A_1. If you have questions about filing your Beneficial Ownership Information report, contact KCARD at (859-550-3972 or kcard@kcard.info. We’re happy to help!