The Financial Crimes Enforcement Network (FinCEN) has issued new guidance on Beneficial Ownership Information (BOI) reporting requirements under the Corporate Transparency Act (CTA). This article breaks down the new FinCEN BOI reporting guidance, explaining the key differences between what FinCEN and banks collect, important deadlines, and how our SOC 2 certified software can help simplify CTA compliance. This guide is essential for CPAs, lawyers, and other professionals assisting clients with their BOI reports.
Important Notice to Small Businesses
Starting January 1, 2024, the Corporate Transparency Act (CTA) requires many small businesses to report their beneficial ownership information to FinCEN. This initiative aims to assist law enforcement and government agencies in combating money laundering and other illicit activities involving shell companies. Concurrently, banks collect BOI to better understand their customers and prevent misuse of their services.
Understanding the Dual BOI Reporting Guidance
Heads Up: Your clients might need to provide BOI to both FinCEN and their banks. For example, when a business opens a bank account, the bank needs to gather info about the entity’s beneficial owners for federal customer due diligence. At the same time, the business may need to report BOI to FinCEN if it qualifies as a “reporting company” under the CTA. This dual reporting requirement is a key aspect of the new FinCEN BOI reporting guidance.
Key Differences Between Bank and FinCEN BOI Requirements
Not Exactly the Same: The info collected by banks and FinCEN isn’t identical. For instance, banks require social security numbers of beneficial owners, but FinCEN doesn’t. FinCEN asks for company applicant information and all DBA names used by the company, which banks don’t need under the new FinCEN BOI reporting guidance.
Defining Beneficial Owners: FinCEN vs. Banks
Different Definitions: While both FinCEN and banks look at beneficial owners through a “control prong” and an “ownership prong,” FinCEN doesn’t cap the number of beneficial owners to report. Banks might need info for up to four individuals under the ownership prong but just one under the control prong.
Frequently Asked Questions (FAQ) on BOI Reporting
Will entities have to report BOI to both FinCEN and banks? Yes! Businesses must report BOI to both FinCEN and banks for different reasons and may need to provide different types of info. Reporting to one doesn’t cover the other. This is outlined in the new FinCEN BOI reporting guidance.
What are the differences in the BOI collected? FinCEN and banks collect different types of BOI. For example, banks need social security numbers, which aren’t required for FinCEN. FinCEN also needs info about company applicants and DBA names, which banks don’t ask for.
Key Deadlines for BOI Reporting Compliance
- Companies created or registered before January 1, 2024, must report by January 1, 2025.
- Companies created or registered in 2024 must report within 90 days of creation or registration.
- Companies created or registered on or after January 1, 2025, must report within 30 days of creation or registration.
- Updates or corrections to previously filed BOI must be submitted within 30 days.
These deadlines are specified in the new FinCEN BOI reporting guidance.
Additional Resources for BOI Reporting Guidance
To stay informed about the latest requirements for Beneficial Ownership Information (BOI) reporting, visit the FinCEN website and review their “Notice to Customers: Beneficial Ownership Information Reference Guide”. Additionally, as mandated by the Corporate Transparency Act, FinCEN will be updating its customer due diligence requirements periodically, so it’s crucial to stay updated on any changes.
Summary of Required BOI Information for FinCEN and Banks
| Information Type | FinCEN Reporting | Bank Collection |
| Beneficial Owners: Name, Date of Birth, Address | ✔️ | ✔️ |
| Social Security Number (or similar) | ❌ | ✔️ |
| Unique Identifying Number (e.g., Passport, Driver’s License) | ✔️ | ❌ |
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