The new beneficial ownership reporting

As part of the 2021 Corporate Transparency Act (the Act), many U.S. businesses are now required to provide the Financial Crimes Enforcement Network (FinCEN) with their beneficial ownership information (BOI). Effective Jan. 1, 2024, companies (other than those specifically exempted) must file a form with FinCEN (through an electronic portal) reporting data about beneficial owners. While there is no filing fee, failure to file can result in substantial civil and criminal penalties, including imprisonment.

Under the current structure, there is a risk that advising on and/or preparing these reports could be considered the unauthorized practice of law by CPAs. As a result, Baker Tilly will not advise on or assist with the preparation of BOI reporting. We recommend that you reach out to your legal representative for assistance in complying with these filings. We can, however, provide you with the following information to help you pull together necessary documentation.

FinCEN has released a Small Entity Compliance Guide, as well as new FAQs addressing reporting requirements. These materials can be a valuable tool in addressing your compliance questions.

What you need to know

Required filers

All domestic and foreign entities formed or registered to do business in the United States must file the BOI report unless they meet one or more of the 23 filing exceptions. Domestic entities are any corporation, limited liability company or other entity created by documents filed with a secretary of state or similar office under the laws of a U.S. state or Indian tribe. Foreign entities are those formed under the laws of a country outside the U.S and registered to do business in any U.S. state or tribal jurisdiction.

There are numerous exceptions, including:

• Large operating entities with over 20 employees, gross revenue of over $5 million in the prior year, and a physical presence in the United States