Beneficial Ownership Information (BOI) – Attention, Small Business Owners! There’s an important announcement you should be aware of. The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, has announced the implementation of a new reporting requirement beginning on January 1, 2024. Many companies will be required to submit beneficial ownership information (BOI). Beneficial owners are the individuals who own or control the company.
Note: No action is required at this time, and not all companies will be required to report. This message is to inform you of the upcoming change.
What is the purpose of the new requirement?
The bipartisan Corporate Transparency Act of 2021 was passed to make it more difficult for bad actors to hide or benefit from ill-gotten gains through shell companies or other opaque ownership structures.
Requiring companies to identify beneficial owners makes it easier for the federal government to crack down on both domestic and international companies that are breaking financial laws.
Who is required to report?
The new reporting requirement applies to most domestic and foreign companies that are created or registered to do business in the United States. There are a few exceptions, including:
- Publicly traded companies that meet certain requirements
- Many nonprofits
- Certain large operating companies
A full list of exempt companies can be found here.
What information needs to be reported?
Companies that are required to report will need to submit the following information about their beneficial owners:
- Full name
- Date of birth
- Current address
- Social Security number or passport number (if applicable)
How to report
Companies can report BOI electronically through FinCEN’s website.
We encourage you to visit FinCEN’s website for more information about the new reporting requirement.
In summary, the U.S. government is proposing a new rule that will require companies to disclose who really owns or controls them. This is crucial because it can help prevent corruption and illegal activities that can harm our economy and national security.
Here are the key points for small businesses:
- The proposal aims to ensure that companies can’t be used for shady purposes, like hiding illicit funds.
- The U.S. Treasury is taking steps to fight corruption and make the economy safer.
- The new rule will ask companies to report who owns or controls them, and it won’t be too expensive to comply.
- The goal is to stop anonymous companies that help criminals hide their money.
- Small businesses are considered, and the rule will be designed to minimize the burden on them.
This is important for small businesses because it will promote transparency and make it harder for people with bad intentions to misuse companies. It’s all about ensuring a fair and safe business environment. Small business owners can also provide feedback on this proposal until February 7, 2022.
At MSM Advisors, we are committed to helping our clients comply with all applicable financial regulations. If you have any questions about the new BOI reporting requirement, please do not hesitate to contact us.
If you think your company could benefit from Business Support or Financial Accounting through MSM Advisors, request a consultation with one of our financial experts. You can learn more about all of our Financial Services by visiting our website or calling 678-804-5530.
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