Small business tips

FinCEN Beneficial Ownership Information Reporting for Small Businesses

featured image

To comply with a new federal law starting this year, many companies, including small businesses, must report beneficial ownership information (BOI) to the U.S. Treasury Financial Crimes Enforcement Network (FinCEN).

You can access all the information you need on the FinCEN Beneficial Ownership Information Reporting web page HERE. Be sure to check the site for updates.

In the meantime, we are helping to share this information with small business owners on what the FinCEN reporting is, why it is needed, who needs to file, when the deadline is, and how to do it.

Whether you own a photography business, social media marketing agency, or cleaning service, or you are a professional organizer, event planner, or personal trainer—full time or part time—here’s what you need to know about the FinCEN reporting requirement.

Also, if you are currently in the process of starting a small business or plan to start a business in the future, whatever type of business that may be, this requirement may apply to you as well. 

What Is It?

According to federal law, beginning on January 1, 2024, companies across the U.S. will have to report information about their beneficial owners—those who directly or indirectly own and control the company. Companies must report this information to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.

Why Do Businesses Need to File?

In 2021, Congress passed the Corporate Transparency Act. This law creates a new reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other vague ownership structures.

Who Needs to File?

A beneficial owner is a person who either directly or indirectly:

  • exercises substantial control over the reporting company; or
  • owns or controls at least 25% of the reporting company’s ownership interests.

Companies that are required to report are called reporting companies. There are two types of reporting companies: domestic and foreign.

Domestic reporting companies are corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States. Contact FinCEN​ to confirm whether your business is required to report.​

Foreign reporting companies are entities (including corporations and limited liability companies) formed under the laws of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office. Contact FinCEN to confirm whether your business must report.​

Some companies are exempt from reporting. Click here to learn more.

When Is the Filing Deadline?

Existing companies that registered to do business before January 1, 2024, will have until January 1, 2025, to file their initial BOI report.

A new company created or registered in 2024 will have 90 calendar days to file after receiving actual or public notice that its creation or registration is effective.

A new company created or registered on or after January 1, 2025, will have 30 calendar days to file after receiving actual or public notice that its creation or registration is effective. This 30-day deadline runs from when the company receives actual notice that its creation or registration is effective or after a secretary of state or similar office first provides public notice of its creation or registration, whichever is earlier.

You can do a search for your business registration on the Oregon Secretary of State’s website HERE to confirm the effective date of the registration.

How Do I File?

If you are required to report your company’s beneficial ownership information to FinCEN, you can do it yourself electronically through a secure filing system available on FinCEN’s BOI E-Filing website. There is no fee for submitting your beneficial ownership information report to FinCEN.

You can also have your attorney or accountant file it on your behalf. They may charge to file the report for you. Or you can use services like LegalZoom or FileForms. These services also charge for completing the filing for you. 

Small business owners may also contact their local SBDCs if they have questions about the FinCEN BOI reporting requirements.

Compliance

FinCEN wants to ensure that reporting companies are aware of their obligation to report, update, and correct beneficial ownership information. If you correct a mistake or omission within 90 days of the deadline for the original report, you may avoid penalties. However, you could face civil and criminal penalties if you disregard your beneficial ownership information reporting obligations.

FinCEN’s Small Entity Compliance Guide provides more information about enforcement of the requirement. (For example, see Chapter 1.3, “What happens if my company does not report BOI in the required timeframe?”)

More Resources

Here are a few resources we encourage every small business owner to review to gain a better understanding of their filing requirements:

Social media channels:

FinCEN will continue updating the Beneficial Ownership Information Reporting page with additional guidance. The FinCEN website remains the best source of information for businesses that have questions about the federal reporting requirements. You can contact FinCEN with questions at https://www.fincen.gov/contact or sign up for updates here.

Share this: