The BOI report (Beneficial Ownership Information), in the United States, is a new requirement regulated by the Financial Crimes Enforcement Network (FinCEN), aimed at combating money laundering and improving financial transparency.
This report requires companies to report on individuals who have a significant control o real benefit about the entity.
Here I explain how to file the report, when it should be filed and what information you should provide.
What is the BOI Report?
The Beneficial Ownership Information Report is part of the Corporate Transparency Act (CTA), approved in 2021, and is administered by FinCEN. This report requires companies to disclose information about their beneficial owners, i.e., individuals who:
- They exercise a significant control on the company (e.g., directors).
- Own or control 25% or more than one company.
Who must submit the BOI report?
- LLCs, Corporations and other entities formed in the U.S. or registered to do business in the U.S. are required to file this report.
- ExemptionsSome entities are exempt from reporting, such as large companies or regulated entities (e.g., banks and insurance companies).
- If your company falls within the exceptions, you must file the report.
What information is needed?
In the BOI report, companies are required to provide specific data on the beneficial owners and the company:
Information on beneficial owners
- Full name.
- Date of birth.
- Address (residential or commercial, depending on the role).
- Identification numberThis can be a passport number, tax identification number (TIN) o social security number (SSN)depending on whether the owner is a citizen or a foreigner.
- Copy of an identification document, such as passport or the driver's license.
Company information
- Legal name of the entity.
- Main address of the company.
- Employer identification number (EIN) of the company, if applicable.
- Registered agent information.
Why is it necessary to present it?
The purpose of this presentation is to increase the corporate transparency in the U.S., and thus help the authorities to:
- Preventing money laundering and financing of terrorism.
- Combating tax evasion and misuse of corporate structures.
- Strengthen the international financial securityThe company is aligned with the recommendations of the Financial Action Task Force (FATF).
When is the BOI report due?
The BOI filing deadline varies depending on the date of incorporation of the company:
- For new companies (formed on or after January 1, 2024): The report must be submitted within 30 days from the date of incorporation of the company.
- For existing companies (incorporated before January 1, 2024): The report must be submitted before January 1, 2025.
In addition, if the beneficial ownership information changes (e.g., if a new owner acquires more than 25% of the company), the report must be updated within 30 days.
How is the BOI report presented?
Some Registered Agents, as is the case with NorthwestIn addition, they offer the option of submitting the BOI report at the time of incorporating your company, for a small extra cost (about $25).
If you did not choose this option or prefer to do it yourself, you can file the BOI report directly with the BOI. FinCEN through an electronic system. Here I explain the steps:
Step 1: Access the FinCEN Portal
FinCEN has enabled a portal on its official website where companies can securely file the BOI report.
Step 2: Complete the online form
Once in the portal, you will have to complete the requested data on the beneficial owners and the company, as mentioned above. The form is online and the system will guide you through the process step by step.
Step 3: Attach the required documentation
You must provide copies of identification documents, such as passports or driver's licenses, for each beneficial owner.
Step 4: Submit the report
Once you complete all the information and attach the documents, you can submit the report electronically.
What happens if you do not file the BOI report?
Failure to file the BOI report or providing incorrect information may result in fines y sanctions. Sanctions include:
- Civil fines of up to $500 per day of delay in the presentation.
- Criminal penalties which may include fines up to $$10,000 or even prison sentence of up to 2 years for serious or intentional violations.
Report update
If there are any changes in the ownership of the company or in the information provided (such as address or identification number of a beneficial owner), you must update the BOI report within 30 days since the change occurs.
Conclusion
The BOI report is an essential new obligation for U.S. businesses designed to improve transparency and combat money laundering. The filing of this report is mandatory for most LLCs and corporations.
Make sure you provide the required information through the FinCEN within the established deadlines and update any changes in beneficial ownership information to avoid fines or penalties.
Frequently asked questions on how to file your LLC's BOI report in the USA
How to submit the boi report?
For submit BOI report If you want to set up your LLC in the U.S., you must first ensure that your entity is registered and complies with all state requirements. The process includes the following steps:
- Gather the necessary information about the LLC and its owners.
- Complete the appropriate form as instructed by the BOI.
- Send the report to the appropriate address, either electronically or by mail.
It is crucial to submit the report within the established deadlines to avoid penalties. Also remember that the accuracy of information is essential, since any error can delay the process or generate legal complications.
When should the boi be submitted?
The BOI (Beneficial Ownership Information) report must be filed by LLCs in the U.S. by the following deadlines 30 days after its formation. This deadline is crucial to comply with regulations and avoid penalties. It is important for owners to familiarize themselves with their state's specific requirements to ensure proper filing.
In addition, if there are changes in owner information, such as the addition or deletion of members, a new BOI report is required to be filed. Circumstances requiring an update include:
- Change of address of the LLC.
- Modification in the ownership structure.
- Change in the owners' contact information.
For LLCs already established, the submission of the report must be made by annuallyfollowing the company's fiscal calendar. Keeping the information updated contributes to greater transparency and legal compliance.
What happens if I don't do the boi report?
If you fail to file your LLC's BOI report in the U.S., you may face serious legal and financial consequences. Failure to comply can result in significant fines and other penalties that affect the operation of your business.
Potential impacts include:
- Fines of up to $500 for each month of delay.
- Possible dissolution of the LLC for non-compliance.
- Problems in obtaining financing or conducting business transactions.
What is BOI LLC?
The BOI, or Beneficial Ownership Information, is a report that requires LLCs in the United States to disclose information about their beneficial owners. This requirement was established to increase transparency and combat money laundering and other illicit activities. The BOI seeks to identify the persons who actually control and benefit from the entity, which is crucial for tax and compliance authorities.