We are officially in the first week of 2024 and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network’s (FinCEN’s) regulations on Beneficial Ownership Information Reporting Requirements (BOI Reporting Requirements) went into effect on January 1, 2024. FinCEN’s Beneficial Ownership Information Registry is now live, but don’t panic! We are here to help you navigate the BOI Reporting Requirements.

     1) When must you report?

Reporting companies created or registered before January 1, 2024, have until January 1, 2025, to comply with these regulations. Reporting companies created or registered in 2024 will have 90 calendar days after creation or registration, as applicable, to comply.

We generally recommend that reporting companies formed or registered prior to January 1, 2024, wait to file their initial report until late 2024 (e.g., October or November). FinCEN has indicated it will provide additional guidance in the coming months, which may clarify some of the obligations under these reporting requirements. Additionally, the obligation to file updated reports does not begin until the initial report has been filed.

     2) Who must report?

FinCEN’s new BOI Reporting Requirements impose filing requirements on domestic and foreign “reporting companies.” “Domestic reporting companies” are corporations, limited liability companies, and other entities created by filing a document with a secretary of state or similar office under state or tribal law. “Foreign reporting companies” are corporations, limited liability companies, and other entities formed under the laws of a foreign country and registered to do business in any state or tribal jurisdiction by filing a document with a secretary of state or other similar office under state law or tribal law.

While the general definitions of “domestic reporting company” and “foreign reporting company” are extremely broad, FinCEN has provided 23 enumerated exemptions that we believe will exclude a large number of businesses from the filing requirements. For example:

• Securities reporting issuers (i.e., public companies)
• “Large operating companies,” which are entities that a) employ more than 20 full-time employees in the U.S., b) reported more than $5,000,000 in gross receipts or sales to the Internal Revenue Service (IRS) in the previous year (excluding gross receipts or sales from sources outside the U.S.), and c) have an operating presence at a physical office within the U.S.
• Investment advisers, venture capital fund advisers, investment companies, and money services businesses
• Domestic pooled investment vehicles that are operated or advised by a bank, credit union, registered broker-dealer, registered investment company or investment adviser, or venture capital fund adviser