On August 7, 2023 we posted New Beneficial Ownership Information Requirement for Most Businesses Beginning January 1, 2024, where we discussed that beginning on January 1, 2024, many corporations, limited liability companies, and other entities created or registered to do business in the United States must report information about their beneficial owners—the persons who ultimately own or control the company, to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).
The Corporate Transparency Act (CTA) established beneficial ownership information (BOI) reporting requirements for certain types of corporations, limited liability companies, and other similar entities created in or registered to do business in the U.S. FinCEN issued final rules implementing the BOI reporting requirements in September 2022.
The final rule establishes a database of beneficial ownership information reported by a "reporting entity" (a corporation or similar legal entity) including the full legal names, dates of birth, and addresses for all individuals who have "substantial control" over the entity or who own at least 25% of it.
Under the final rule, companies created or registered before January 1, 2024, would have until January 1, 2025, to file their initial BOI reports with FinCEN. Entities created or registered on or after January 1, 2025, would have 30 days to file their initial BOI reports. The new proposal would not change these deadlines. Only newly created or registered companies would get an extension to file their initial BOI reports.
FinCEN believes that the proposed extension of the BOI reporting deadline for the first year of implementation will increase compliance, reduce burden on reporting companies, and promote the creation of a highly useful database.
FinCEN believes the proposed extension from 30 to 90 days will give reporting companies created or registered in 2024 additional time to understand their regulatory obligations under the BOI reporting rule and obtain the required information. They will also have additional time to become familiar with FinCEN's guidance and educational materials and resolve questions that may arise when completing their initial BOI reports.
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