bio | AAG Consultant

Beneficial Ownership Information Reporting

A new rule will impact many companies across the United States starting January 1, 2024. Businesses will now be required to disclose information about their beneficial owners—the people who ultimately own or control the company. This information must be reported to the Financial Crimes Enforcement Network (FinCEN), a bureau under the U.S. Department of the Treasury.

Why does this matter? It’s all about transparency. The goal is to prevent illegal activities like money laundering and fraud by clarifying who is behind each business. For companies, this means understanding the new requirements and preparing to submit accurate information to FinCEN to avoid penalties. So, if you’re a business owner, ensure you’re up to date on this important change!

Ready to make sure your company is prepared? Book a free consultation call today!

To ensure your company is fully prepared, let’s explore all the information required for reporting and determine if a process needs to be set up for managing future updates. By understanding your company’s specific needs, we can help you stay compliant and make your operations smoother.

Overview

Group of business people meeting, communicate, discuss documents.jpeg

Reporting Company

Every corporation, LLC, general partnership, or other entity that has registered with the Secretary of State is required to file a Beneficial Ownership Information (BOI) report.

This mandatory filing ensures transparency and compliance with regulations governing business ownership and accountability.

_Lawyer_ Pointing To Part Of Contract_ by Stocksy Contributor _Sean Locke_ (1).jpeg

Beneficial Owner(s)

A beneficial owner is an individual who, either directly or indirectly, meets one of the following criteria:

Has significant control over a reporting company, or
Owns or controls 25% or more of the company’s ownership interests.

These individuals play a key role in the management or ownership structure of the business.

Premium Photo _ Startup business team on meeting in modern bright office interior and work

Company Applicants

There are two types of company applicants:

Direct Filer - The person who submits the filing directly.
Individual Who Directs or Controls the Filing - The person responsible for overseeing or authorizing the filing process.

Each type plays a role in ensuring the accuracy and compliance of the company's submissions.

Why do companies Have to Report?

The Corporate Transparency Act was passed by Congress in 2021. The law's purpose is to prevent fraud in business by increasing transparency.

Under this law, all qualifying businesses must submit a Beneficial Ownership Information (BOI) Report. This report identifies the company’s beneficial owners and applicants, ensuring accountability and compliance with regulatory standards.