Over time, there are always changes to business compliance requirements. One of the newest reporting requirements is Beneficial Ownership Information (BOI). This new requirement was created under the Federal Corporate Transparency Act to strengthen the integrity of the U.S. financial system making it harder to launder money, hide assets, or avoid tax liability.
What Does Beneficial Ownership Mean?
The rule identifies two types of companies that must report: domestic and foreign. Domestic reporting companies are entities created by filing with a secretary of state or any similar office under the law of a state. This generally means that LLCs (including single-member LLCs), corporations and limited partnerships are required to file BOI reports if they are not otherwise exempted from the reporting requirement. Because many farms operate under an LLC, corporation, or limited partnership, they are considered “Domestic Reporting Companies” and will need to file.
The reports can be filed online, and companies must provide information about each beneficial owner, which includes anyone who owns at least 25% of the company, as well as anyone who has “substantial control” over the business.
How Does This Impact Existing Companies?
Companies that existed before the start of 2024 have until January 1, 2025, to file a BOI report, while companies created or registered in 2024 will have 90 days after their creation to file. Any company that has already filed its first report will have just 30 days to report any updates, such as a new beneficial owner or a change in address. Failure to report information to FinCEN in the required timeframes may result in civil or criminal penalties.
Additional Questions About Beneficial Ownership
More information about beneficial ownership can be found at: https://www.fincen.gov/boi-faqs or within this informational brochure. When it comes to the success of your farming operation, AgQuest is committed to ensuring our customers are well informed and up to date on changes in regulations and requirements. If you are looking for more guidance on Beneficial Ownership, we encourage you to talk to your tax preparer.