Beneficial Ownership Information (BOI) Reporting

Dear Clients:

This letter to inform you of possible reporting requirements to the Financial Crimes Enforcement Network (FinCen), a Department of the Treasury, for Beneficial Ownership Information (BOI) reporting. We have sent this letter to all clients, because the reporting requirements for BOI all companies and single-member LLCs. If you do not have a Company or a single member LLC, you do not need to read the rest of this letter.

In 2021, Congress passed the Corporate Transparency Act (CTA) on a bipartisan basis. This law creates a new beneficial ownership information (BOI) 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 opaque ownership structures.

Companies Required to File:

Companies required to report are called “reporting companies.” There are two types of reporting companies - domestic and foreign, but we believe that BGC clients that are required to file will fall under the domestic reporting company definition as specified by FinCEN below:

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. This includes single member LLCs which may not file a tax return separate from its owner.

There are 23 types of entities that are exempt from the reporting requirements (see Question C.2 on the FinCEN website (www.fincen.gov/boi) for a detailed list of exceptions). Carefully review the qualifying criteria before concluding that your company is exempt.

If you do not meet one of the exceptions, your Company will need to file. Again, the filing requirements apply to single member LLCs, unless an exemption is met.

When is the BOI filing due?

Most companies will need to file an initial BOI report by January 1, 2025.

  • A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial BOI report.
  • A reporting 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 reporting 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.

Once you complete an initial BOI report with FinCEN, under current rules you will not need to refile except for under certain circumstances, such as an ownership changes or addresses for the business or owners change. changes. There may be other requirements for later filings. We recommend you consult FinCEN’s “Small Entity Compliance Guide” that is available under FAQ F.6 at www.fincen.gov/boi-faq#f_6.

How to File the BOI report:

To file the BOI report, FinCEN launched the BOI E-Filing website for reporting beneficial ownership information (https://boiefiling.fincen.gov) on January 1, 2024. You will have to create a FinCEN ID user profile to file the report.

Will BGC prepare the BOI reporting for you?

CPA firms are currently receiving professional advice and guidance to not prepare, assist in the preparation of or otherwise advise clients concerning any filings required under the Corporate Transparency Act.

The FinCEN website (fincen.gov/boi) provides more details about any reporting or filings that may be required, and our recommendations to clients is to consult with their legal counsel if they have questions regarding the applicability of the CTA’s reporting requirements and any corresponding issues surrounding the collection of relevant ownership information. We have found that most law firms are also not assisting with this filing and instead asking the business owners/operators to complete the submission.

While there remains opposition to this legislation that could ultimately lead to delays in the effective date or potentially even its repeal, there is not currently enough movement in this regard for us to advise you any differently other than to presume it will remain in effect and you will need to complete it timely.

Very truly yours,

Bradshaw Gordon & Clinkscales, LLC