BOI filing under the CTA

"BOI" in a tax context typically refers to "Beneficial Ownership Information." This involves the reporting requirements for businesses to disclose their beneficial owners to the relevant authorities, like the IRS in the U.S. or similar agencies in other countries. Here's an overview of BOI filing requirements:

1. Purpose: BOI filing aims to improve transparency about the individuals who own or control a company. This helps prevent illicit activities like tax evasion, money laundering, and financing of terrorism by requiring disclosure of those who benefit financially from the business.

2. Who Must File: Reporting requirements generally apply to a wide range of entities, including corporations, limited liability companies (LLCs), and similar business structures. Certain entities, such as publicly traded companies or regulated financial institutions, may be exempt.

3. Information Required: Typically, BOI filings require details on each beneficial owner, including:

   • Full legal name
   • Date of birth
   • Residential or business address
   • Tax identification number or a similar identifier

4. Filing Deadlines: BOI filings are usually due annually, but deadlines can vary by jurisdiction. Entities must also update filings when ownership changes or new individuals meet the criteria for beneficial ownership.

   Existing Entities (Established Before January 1, 2024):

   • Deadline: Entities created or registered before January 1, 2024, must submit their BOI reports by January 1, 2025.
   • Updates: After the initial report, any changes to beneficial ownership must be reported within 30 days of the change.

   New Entities Created in 2024:

   • Deadline: Entities created or registered between January 1, 2024, and January 1, 2025, have 90 calendar days to file their BOI report with FinCEN after receiving notice that their company’s creation or registration is effective.
   • Updates: After the initial filing, any changes in beneficial ownership must be reported within 30 days of the change.

   New Entities Created After January 1, 2025:

   • Deadline: For entities created on or after January 1, 2025, the BOI report must be filed within 30 days of formation or registration.
   • Updates: Like other entities, updates for any changes in beneficial ownership must be reported within 30 days of the change.

   Summary of Key Points:

   • 90-Day Deadline: Applies specifically to entities registered in 2024, allowing 90 days post-registration for the initial BOI filing.
   • 30-Day Update Requirement: After initial filing, all entities have 30 days to report any changes in ownership or control.
   • No Annual Filing Requirement: After the initial report, no annual re-filing is necessary unless ownership changes.

5. Penalties for Non-Compliance: Failure to file accurate BOI can result in penalties, which may include fines or other legal consequences, depending on jurisdiction.

6. Data Privacy: Jurisdictions often have strict rules to protect the privacy of beneficial ownership data, limiting access to only authorized parties such as law enforcement or tax authorities.

The Corporate Transparency Act (CTA) in the U.S., which took effect in 2024, established BOI filing requirements for certain U.S. entities.