As we step into 2024, business owners face a new compliance obligation - the Beneficial Ownership Information (BOI) report. This requirement stems from the Corporate Transparency Act, enacted in 2021, aiming to enhance financial transparency and combat illegal activities. This reporting is done through FinCEN, which taxpayers may be familiar with if they are subject to FBAR reporting for any overseas assets or bank accounts.
Quick Takeaways:
- The BOI filing requirement is to report the owners and owner's information of your business to the Financial Crimes and Enforcement Network (FinCEN)
- This new BOI filing requirement is for ALL business owners moving forward, with few exceptions
- Business owners with business start dates prior to 2024 have all year (2024) to file
- Business owners starting their business in 2024 must have their initial filing done within 90 days of opening
- Business owners will have to refile the BOI when ANY information about owners change
- Club Capital is positioned to help our clients and their network with these filings
The implementation of the BOI report's logistics has been gradual, prompting legal and accounting professionals, including the AICPA, to advocate for a delay due to prevailing uncertainties. Although the House passed a bill incorporating some proposed amendments, the Senate's response is pending. Recently, FinCEN activated their reporting portal and started accepting submissions from January 1st.
Unique to this reporting obligation, it is not an annual requirement. Businesses must file the report once, with subsequent submissions necessary only if there are changes in the reported information. The report focuses on the business owners' details rather than the business.
Important timelines for business owners include:
- Businesses operational before January 1, 2024 must submit their initial report by January 1, 2025.
- Businesses starting post-January 1, 2024 need to file within 90 days of establishment.
- Following the initial report, any amendments must be communicated within 30 days of the change.
At Club Capital, we're proactively gearing up to guide our clients through their initial reporting. Over the upcoming months, we'll evaluate individual client needs and offer assistance where necessary. This reporting requirement will also be incorporated into our entity formation services.
The crucial aspect for business owners is managing the update process. Unlike typical annual reports, the BOI report demands updates within 30 days of any changes. This shorter timeframe means tax firms may not have immediate information to advise on necessary updates. Business owners should actively engage with their tax and accounting advisors to determine responsibilities and support for compliance.
At Club Capital, we're prepared to help with any report updates, but we rely on our clients to promptly inform us of any changes so that the updated report can be filed within the 30 day timeframe.
For any questions or assistance with the new BOI Report Requirement, reach out to Club Capital. Our team of advisors is ready to ensure your compliance and peace of mind.
For current Club Capital clients feel free to reach out to your Account Manager for more information or send us any questions below:
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