For each beneficial owner, the company must disclose (1) full legal name, (2) date of birth, (3) address, (4) identifying number from the individual’s ID (driver’s license or passport) and (5) a copy of the ID used. The reporting company must report the entity’s (1) legal name, (2) any trade names or dba names, (3) principal place of business, (4) state of formation and (5) unique taxpayer ID number.
Understanding the Reporting Deadlines
While FinCEN has said that roughly 6.5 million entities have filed, the bureau estimates that about 32 million companies are actually required to report. The law has created a sliding scale for applicable reporting deadlines, depending on when the business entity was formed.
Entities created before Jan. 1, 2024, must file their BOI reports before Jan. 1, 2025. Entities created after Jan. 1, 2024, have 90 days from the date their registration becomes effective to report the required information.
Starting in 2025, new entities have only 30 days from the date of creation to complete the reporting form. The clock starts to run on the date the entity has actual knowledge that its registration is effective, or the date when registration is published publicly.
Exceptions to the reporting requirement are rare. The law does create exemptions for tax-exempt entities, certain political organizations and inactive organizations that are no longer conducting business. Large organizations can be exempt if they have more than 20 U.S. employees, have filed a tax return showing more than $5 million in gross receipts or sales during the prior year and have an operating presence at a physical site within the United States. If an entity fluctuates above and below the 20-employee limit, it must file.
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The post Are Small-Business Clients Ready for This Looming Deadline? appeared first on Insurable Interest Canadian Insurance Blog.
