Kaminski Law Group - Understanding the Beneficial Ownership Information Reporting Requirement: What You Need to Know

Understanding the Beneficial Ownership Information Reporting Requirement: What You Need to Know

In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.

The Beneficial Ownership Information (BOI) Reporting Requirement, introduced as part of the Corporate Transparency Act (CTA) and enforced by the Financial Crimes Enforcement Network (FinCEN), is a significant new obligation for many small businesses. While Kaminski Law Group does not assist clients with BOI filing, we want to ensure our clients are aware of this important requirement and the potential consequences of noncompliance.

Who Must File BOI?

All small businesses registered with a Secretary of State (SOS) must report Beneficial Ownership Information (BOI) to FinCEN. This includes:

LLCs
Partnerships of all types
S-Corporations
C-Corporations
Some Trusts

A small business is defined as one that meets the following criteria:

20 or fewer full-time employees
$5 million or less in domestic gross receipts reported on the prior tax return
A physical U.S. presence

Key Deadlines

The reporting timeline depends on when your business was registered with the SOS:

Registered Before January 1, 2024:
- Deadline: January 1, 2025
Registered Between January 1, 2024, and January 1, 2025:
- Deadline: 90 days from registration
Registered After January 1, 2025:
- Deadline: 30 days from registration

Who Counts as a Beneficial Owner?

A beneficial owner includes any individual who:

Exercises Substantial Control: This includes senior officers, individuals with authority to appoint or remove directors, or key decision-makers.
Owns Significant Interest: Anyone who owns or controls at least 25% of the ownership interest in the reporting company.

What Information Must Be Reported?

The required Beneficial Ownership Information (BOI) includes:

Full legal name
Date of birth
Current street address (P.O. boxes are not accepted)
A unique identification number from a valid passport, driver’s license, or similar government-issued document
An image of the document used for identification

Penalties for Noncompliance

Noncompliance with BOI reporting can result in serious consequences, including:

Civil and Criminal Penalties
Fines
Imprisonment

How to File

For more information or to self-file, visit the official FinCEN website: https://fincen.gov/boi.

Need Assistance?

While Kaminski Law Group does not handle BOI filings, we encourage you to seek guidance from a professional familiar with this process to ensure compliance and avoid penalties. If you have questions about how this requirement might intersect with your broader estate planning goals, feel free to reach out to us at (916) 540-7618 or hello@californiatrusts.law.

Kaminski Law Group is here to help you navigate other important legal and estate planning matters, so you can focus on what matters most—your family and your future.