New Federal Reporting Requirement for Beneficial Ownership Information (BOI)
Effective January 1, 2024, many companies in the United States must report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the US Department of the Treasury.
When opening an account at United Bank, all businesses must complete a Beneficial Ownership Form. The completion of this form is required for the bank to maintain compliance with the Customer Due Diligence Rule that was put in place through the Bank Secrecy Act. This form collects specific identification information on both the company and its beneficial owners.
What is a beneficial owner?
A beneficial owner of a company is any individual or individuals who directly or indirectly own or control the company.
Who must report BOI information?
Certain companies are required to report only if they meet the Reporting Rule’s definition of a “reporting company” and do not qualify for an exemption.
Is my company a “reporting company"
Your company may need to report information about its beneficial owners if it is:
1. A corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
2. A foreign company and was registered to do business in any U.S. state or Indian tribe by such a filing.
Which entities are exempted?
Twenty-three types of entities are exempt from beneficial ownership information reporting requirements, including publicly traded companies, nonprofits, and certain large operating companies. For more information regarding more specific information on what entities are exempt, visit fincen.gov/boi.
How do I report?
Reporting companies report beneficial ownership information electronically through FinCEN’s website: fincen.gov/boi. The system provides a confirmation of receipt once a completed report is filed with FinCEN.
When do I have to report?
FinCEN began accepting reports on January 1, 2024.
- If your company was created or registered prior to January 1, 2024, you will have until January 1, 2025 to report BOI.
- If your company is created or registered in 2024, you must report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.
- If your company is created or registered on or after January 1, 2025, you must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
- Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 days.
What is the penalty for not reporting the required beneficial ownership information?
The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in a civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or 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.
Where can I find out additional information?
More information pertaining to FinCEN’s Beneficial Ownership Reporting Requirements can be found at fincen.gov/boi.
United Bank is not offering any legal advice pertaining to this rule. Customers should seek guidance from their legal counsel for additional information regarding this new requirement.