New Federal Reporting Requirement for Small Businesses: Beneficial Ownership Information

Owning a small business comes with many challenges and among those challenges is the requirement to file forms and reports to various governmental entities. Effective January 1, 2024, there is yet another reporting requirement that has recently become a requirement for many small businesses. The Beneficial Ownership Information (BOI) reporting was implemented by the Financial Crimes Enforcement Network (abbreviated FinCEN), an arm of the U.S. Department of the Treasury, to capture information about small businesses who oftentimes “fly under the radar” when it comes to reporting their business ownership, activities, and revenues. In 2021 the U.S. Congress pass the Corporate Transparency Act. This law creates a new reporting requirement as part of the United States government’s attempt to make it harder for bad actors to hide income or benefit from ill-gotten gains through nontransparent ownership structures. This Act is aimed at catching money launderers and those who fund terrorism, however all small business owners must be aware that they might be required to file a BOI Report (BOIR).