BOI Reporting Requirements for Newly Formed Entities Take Effect

Background

The Financial Crimes Enforcement Network (FinCEN) has introduced new reporting requirements for entities that have been created or registered in the United States, aimed at combating money laundering, terrorist financing, and other illicit activities.

Effective Dates

Effective January 1, 2024, newly formed entities will have a 90-day window to file their initial Beneficial Ownership Information (BOI) reports. This deadline applies to companies established between January 1, 2024, and December 31, 2024.

For entities created or registered in 2025, the filing period is reduced to just 30 days from the date of formation or registration.

Existing companies, formed before January 1, 2024, have until January 1, 2025, to file their initial BOI reports.

Requirements

Once an entity has filed its initial report, it will be required to update its BOI within 30 days of any changes to its ownership structure.

Complex Requirements Demand Legal Guidance

The BOI reporting requirements are complex and require legal expertise to navigate. Impacted companies should seek advice from qualified legal counsel with experience in this area to ensure compliance with the new regulations.

Failure to comply with the BOI reporting requirements can result in significant civil or criminal penalties.

In addition to compliance, legal counsel may recommend revisions to an entity’s operating agreements and other legal documents to include provisions related to the BOI reporting requirements.

Resources

For more information on the new BOI reporting requirements, visit FinCEN’s website at https://www.fincen.gov/boi.

This article is provided for general education purposes only and should not be considered tax or legal advice.