New Federal Reporting Requirement

As of January 1, 2024, a pivotal change in regulatory compliance will affect a wide spectrum of U.S. businesses: the implementation of a new federal reporting requirement for Beneficial Ownership Information (BOI). This mandate, overseen by the Financial Crimes Enforcement Network (FinCEN) within the U.S. Department of the Treasury, aims to bolster transparency and combat financial misconduct by compelling companies to divulge details about their beneficial owners—the individuals who ultimately possess or control the organization.

The Need for Transparency

The introduction of the BOI rule marks a significant step toward enhancing corporate transparency in the United States. With this new federal reporting requirement and mandating companies to disclose information about their beneficial owners, the government seeks to mitigate risks associated with money laundering, terrorism financing, and other illicit financial activities. This initiative aligns with global efforts to strengthen anti-money laundering (AML) and counter-terrorism financing (CTF) measures.

Key Requirements and Exemptions

1. Reporting Process:

• Simplicity and Accessibility: Filing for BOI is designed to be straightforward and accessible, leveraging electronic submission through FinCEN’s dedicated platform. This process ensures that compliance is both user-friendly and efficient.
• One-Time Filing: In most cases, companies are required to file BOI only once, unless updates or corrections are warranted.
• Exemptions: Not all entities are subject to the BOI requirement. Twenty-three categories of businesses, including publicly traded companies, nonprofits, and certain large operating companies, are exempt from reporting.

2. Compliance Deadlines:

• For Pre-2024 Companies: The new federal reporting requirement deadline for reporting BOI is January 1, 2025, providing an extension period for existing businesses to prepare and comply.
• For 2024 Companies: Newly created or registered businesses must report BOI within 90 days of receiving notification that their creation or registration is effective.
• For Post-2024 Companies: Any entity created or registered after 2024 must submit BOI within 30 days of their creation or registration becoming effective.
• Updates and Corrections: Companies must promptly report any changes to their beneficial ownership information within 30 days of becoming aware of the need for an update.

How to Navigate the Reporting Process

For companies navigating the new federal reporting requirement for BOI, FinCEN has established an electronic filing system accessible via its official website, www.fincen.gov/boi. This platform ensures secure submission and compliance tracking, facilitating smooth adherence to regulatory obligations.

Expert Guidance and Support

Understanding and implementing this new federal reporting requirement can be daunting. Anderson, Adkins & Company stands ready to assist businesses in navigating the complexities of BOI reporting. Our dedicated team offers expert guidance tailored to meet your specific needs, ensuring accurate and timely compliance with regulatory standards.

As regulatory landscapes evolve, staying informed and compliant is crucial. Partner with Anderson, Adkins & Company to streamline your BOI reporting process and safeguard your business against regulatory risks.