As your financial advisors, we try to stay informed about regulatory changes that might impact your financial life. In that spirit, we wanted to provide a heads up regarding legislation passed under the 2021 Corporate Transparency Act goes into effect this year. This created Beneficial Ownership Information (BOI) Reporting Rules. The effect of this law is that many companies and other entities will be required to report their owners or beneficiaries to the Financial Crimes Enforcement Network (FinCen) to increase transparency. Here is a summary of the key provisions:
Who is Impacted?
The BOI Reporting Rules primarily affect corporations, limited liability companies (LLCs), and other similar entities. Generally the entity has to have filed with the Secretary of State or similar office to have this requirement, but this may include:
An LLC set up to provide consulting services separate from your other employment or business.
An LLC set up to hold rental properties or hold property on behalf of a group of owners.
Some types of trusts created under estate plans, such as a Family Limited Partnership
When to Act?
Existing Entities: If your entity was registered before January 1, 2024, you must report beneficial ownership information by January 1, 2025.
New Entities: If your entity is registered on or after January 1, 2024, you must report within 30 days of registration.
What to Report?
You are required to provide specific information about beneficial owners and company applicants, which includes names, birthdates, addresses, and unique identification numbers from an acceptable identification document.
How to Learn More
Unfortunately, Bluestem cannot provide interpretation of these rules as it would be considered legal advice. If you have questions, we suggest you start with the FinCen website. They have helpful FAQ’s and Brochures at: https://www.fincen.gov/boi-faqs
If you have an attorney that assisted in setting up your business, consulting entity, or trust under an estate plan, you may reach out to this person for further information.