As a business owner, it is essential you stay up to date with changes in the law. One that could affect you is the new Beneficial Ownership Information Report (BOIR) requirement.
Congress passed this measure back in 2021, with it eventually coming into effect on January 1 of this year, 2024.
The reason for the law is to make it easier for the government to see who owns or benefits from a particular company. They can then use this information to weed out anyone who is setting up or investing in companies for illicit means, such as money laundering.
Does it apply to you?
Not everyone needs to worry about this change as 23 types of businesses are exempt from the new reporting requirement. They include banks, credit unions, accountancy firms, public utility companies and governmental authorities. Sole traders are also exempt from it.
Note that just because you formed your business overseas does not mean you are exempt. If you have registered to do business in the U.S. you likely need to complete the report unless your company falls into one of the 23 exempt categories.
What do they want to know?
You’ll need to give details of all ‘beneficial owners”. This means those who own 25% or more of the company or have significant control over it. For businesses formed since the law came into force, you’ll also need to provide details of the “applicants’’ – that is those who filed the documents to create or register the company or had primary control over the process.
As with any legal reporting requirement, it is important to be accurate and transparent. Omitting information or providing false information could cause you significant problems. Seeking appropriate guidance is a wise precaution.