Which Companies are Subject to the New Requirements

The requirement to submit a report is relevant for many enterprises, especially for small businesses. Your company must report information about its beneficial owners if it falls into one of the following categories:

• A corporation, a limited liability company (LLC), or an organization formed in the United States by registering with the office of the state secretary or a similar authority under the laws of the state or Native American tribe;
• A foreign company registered to conduct business in any of the U.S. states or with Native American tribes. 

Exceptions to the Rules

There are a small number of organizations that are exempt from BOI submission requirements. There are 23 types, and FinCEN's guidance contains checklists for each of these exemptions. This allows you to determine if your company falls under any of these exemptions. These exemptions provide some flexibility, but they must be carefully reviewed and applied in accordance with the law.

Report Submission Process

Reports on beneficial owners are accepted through a special electronic BOI filing system on the official FinCEN website. It should be noted that the deadlines for submitting reports vary depending on the date of the company's registration.

• For companies registered after January 1, 2024: The deadline for submission is 90 days from the notification of the company's formation or registration in a state or Native American tribe. This 90-day period begins from the moment the company receives actual notice that its formation or registration is effective, or from the time the state secretary or a similar institution first publishes a notice of the company's formation or registration, whichever occurs first. Starting from 2025, the submission period will be reduced to 30 days. 
• For companies incorporated before January 1, 2024: The filing deadline is extended to January 1, 2025, giving companies a year to comply with the new requirements. 

Any changes or additions to the already provided information about beneficial owners must be reported to FinCEN within 30 days after making the changes.

New Rules for Foreign Owners

Since the beginning of 2024, new rules have come into effect, affecting companies owned by foreigners. These rules include not only direct owners but also managers, as well as beneficial owners. This change is intended to enhance control and transparency in financial transactions involving foreign companies in the U.S.

Liability for non-compliance

Companies that ignore or fail to comply with these new requirements may face serious legal consequences. This includes the possibility of administrative and criminal prosecution, as well as fines of $500 for each day of delay in filing reports. In cases of continued violations, penalties may include imprisonment for up to 2 years and/or fines of up to $10,000. Therefore, it is important not to ignore these requirements and to comply with them in a timely manner.

These changes in reporting requirements represent a significant step in the fight against financial crimes and strengthening transparency in the business environment of the United States. Entrepreneurs need to be attentive to these innovations, familiarize themselves with the details, and comply with the requirements in a timely manner to avoid legal consequences. 

Our company, TaxFreeCorp, is ready to provide you with qualified assistance in complying with the new reporting requirements. Our experts will help you file the report and meet the deadlines. Contact us today for professional support.