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The 2024 Beneficial Ownership Information Reporting Requirements Dictate New Filing Obligations and Deadlines for Companies, Owners, and Applicants
The 2024 Beneficial Ownership Information Reporting Requirements have introduced new obligations for reporting companies, beneficial owners, and company applicants. To ensure compliance with these regulations, it is important to understand when entities and individuals are required to file their initial Beneficial Ownership Information (BOI) reports. This insight article will outline the BOI filing deadline for existing entities and new entities, based on the effective date of the final rule, and clarify any exceptions for company applicants.
BOI Filing Deadline for Existing Entities
If your entity was in existence before the effective date of the final rule, which is January 1, 2024, you have until December 31, 2024, to submit your BOI report. This deadline allows existing entities a one year period to gather the necessary information and report their beneficial ownership details accurately. It is essential to use this time wisely to ensure compliance with the reporting requirements and avoid any potential penalties.
While it is mandatory for reporting company’s and beneficial owners to file no matter the date of entity establishment, if the entity in question was established before the effective date, its company applicants are not required to file. Those who incorporate on or after January 1, 2024 will need to ensure their company applicant’s are compliant to these new regulations.
BOI Filing Deadline for New Entities
For entities established after the effective date, a different timeline applies. If your entity is created on or after January 1, 2024, you must file your BOI report within 30 days of establishment. This means that you have a shorter window to gather the required information and submit your report. It is important to prioritize the collection of beneficial ownership details and promptly file your report to meet this deadline.
Triggers for Updating BOI Reporting
In addition to the initial filing, be aware of triggers that may necessitate an updated BOI report. FinCEN has identified three primary triggers for updates based on their assessment:
- A change in the address of a beneficial owner
- The death of a beneficial owner
- A management decision resulting in a change in beneficial ownership.
While these are the most likely triggers for updates, there may be other causes that require an updated BOI report. Some examples include a change in the name or identifying document number of a beneficial owner, the expiration of an identification number document, or changes in the identifying information for the reporting company itself, such as its address or name/DBA (Doing Business As).
FinCEN anticipates that these additional triggers for updates will occur at a relatively minor rate compared to the three primary triggers.
Commenters in the rule-making process proposed various examples of whether updating the image of the identification documents would be triggering events.
For instance, some thought that even though a renewed driver’s license may not include a changed identification number, if the image of the driver’s license changes, an update to the BOI report would be required.
However, a change in the image of a document does not relate to the information required to be reported in 31 CFR 1010.380(b)(1)(ii)(A–D) on the identification document will not trigger the need for an update. These requirements are discussed in FinCEN Beneficial Ownership Reporting Demands Coming in 2024: Are You Prepared?.
In the case of a trigger, such as a change in name, address, or identifying document number, the reporting entity has 30 days to file the updated report. Timely reporting of these updates is crucial to maintaining accurate and up-to-date information in the BOI report, reflecting any changes in the ownership structure or relevant details of the entity or individuals involved.
Are You Prepared to File?
By staying vigilant and promptly filing any required updates to the BOI report, entities can demonstrate their commitment to transparency and compliance with the reporting requirements. This helps foster a more robust and accountable financial system, preventing illicit activities and promoting trust in business transactions.
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