• by admin
• November 18, 2024

Are you the owner of an entity that is incorporated or registered in the United States of America?  Are you controlling the entity directly or indirectly, either 25% or more? You may be obligated to report BOIR.

BOIR is the Beneficial Ownership Information Reporting is required under the Corporate Transparency Act by certain types of U.S. Entities and foreign entities. This reporting was implemented since January 01, 2024. You may be penalized if you do not report this on time.

BOIR is reported to the Financial Crimes Enforcement Network of the United States of America. If you are an entity registered before January 01, 2024, your deadline to report is by January 01, 2025. If you are an entity that existed as of January 01, 2024, or later, your reporting deadline is within 90 days of your existence (incorporation/registration). Entities that will be incorporated or registered on or after January 01, 2025, needs to report BOIR within 30 days.

Penalty: If you are late on filing your BOIR you will face a penalty which is $500 per day and the penalty is increased to $591 per day since January 01, 2025. The penalty is also applied when the BOIR reported contains incorrect or incomplete information. The penalty can also be substituted by criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure. 

 

Reporting sections

BOIR reporting contains three sections.

1. Reporting entity
2. The applicant
3. The beneficial owners

 

What information you need to report

You need to report the following details:

• Types of filing – Initial, Corrections, or an update.
• Details of the Entity that is registered/incorporated in the United States – this includes a foreign entity if they are registered with any of states in the United States. The information reported includes name of the entity, their U.S. address, and Jurisdiction of formation.
• Verify the status of the Entity – the status is normally verified by the Employer Identification number (EIN), SSN/ITIN or Foreign tax ID.
• Details of the applicant – The information includes FinCEN ID,  name, date of birth,  and residential or business address.
• Verify the identity of the applicant – Attach a State of Locally issued ID, or Driving License or U.S. Passport. If you are a foreign national, you need to attach a copy of your foreign passport.
• Details of the beneficial owner/owners – The information includes FinCEN ID,  name, date of birth,  and residential or business address.
• Verify the identity of the beneficial owner/owners – Attach a State of Locally issued ID, or Driving License or U.S. Passport. If you are a foreign national, you need to attach a copy of your foreign passport.
• Information of the person reporting this BOIR – Name and email address.

 

What is beneficial owner

• An individual who has substantial control over the reporting company, or
• The individual owns or controls at least 25% of the ownership interests in the reporting company

BOIR Update

You make an initial report when you report your BOIR for the first time.  When you need to report any changes, you report them as an update to your BOIR report.

You need to update your BOIR when there are any changes in the name and address of your identification document or with respect to your entity’s information. When your ID or passport or driving license is renewed, which you have you have as your identifying document, you need to update your BOIR. The timeline to update your BOIR is 30 days from the date of your information change.

Some small entity may be exempted from this reporting. A foreign entity that is not registered in any of the states of the United States is exempt from reporting. Further, the below 23 specific types of entities have been exempted from reporting.

1   Securities reporting issuer

2   Governmental authority

3   Bank

4   Credit union

5   Depository institution holding company

6   Money services business

7   Broker or dealer in securities

8   Securities exchange or clearing agency

9   Other Exchange Act registered entity

10   Investment company or investment adviser

11   Venture capital fund adviser

12   Insurance company

13   State-licensed insurance producer

14   Commodity Exchange Act registered entity

15   Accounting firm

16   Public utility

17   Financial market utility

18   Pooled investment vehicle

19   Tax-exempt entity

20   Entity assisting a tax-exempt entity

21   Large operating company

22   Subsidiary of certain exempt entities

23   Inactive entity

 

Disclaimer: Information in the blog/post/article has been presented for a broad and simple understanding. This is not legal advice. RKB Accounting & Tax Services does not accept any liability for its application in any real situations. You need to contact your accountant or us for further information.

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