New Beneficial Ownership Information Reporting Requirement

Bookstores may have a new filing requirement! Deadline January 1, 2025!

The Financial Crimes Enforcement Network (FinCEN, a part of the U.S. Treasury) has new federal reporting requirements for Beneficial Ownership Information (BOI) that may impact bookstores. It requires corporations, S-corporations, and LLCs to report identifying information about the individuals who directly or indirectly own or control a company to FinCEN. FinCEN launched the BOI E-Filing website for reporting BOI on January 1, 2024.

Importantly, the new reporting requirement DOES NOT apply to sole proprietorships unless a sole proprietorship was created in the United States by filing a document with a secretary of state or similar office. (Filing a document with a government agency to obtain (1) an IRS employer identification number, (2) a fictitious business name (a name used by a business that is different from its legal name), or (3) a professional or occupational license does not create a new entity, and therefore does not make a sole proprietorship filing such a document a reporting company.)

Here are some details about the new reporting requirement:

• This new reporting requirement applies to any business that is a corporation or a Limited Liability Company (LLC) or an S-Corporation. Importantly, however, if a domestic corporation (this applies to ALL corporations) or limited liability company is not created by the filing of a document with a secretary of state or similar office, it is not considered a reporting company and does not have to report. Most domestic corporations and LLCs are most likely created by the filing of a document with a secretary of state or similar office. (Don’t remember if you filed with the Secretary of State? Businesses that typically must register with the Secretary of State in most states are corporations, LLCs, partnerships, and non-profit corporations.)
• A beneficial owner is an individual who either directly or indirectly: (1) exercises substantial control (see page 18 of the FAQ) over the reporting company, or (2) owns or controls at least 25% of the reporting company’s ownership interests. Because beneficial owners must be individuals (i.e., natural persons), trusts, corporations, or other legal entities are not considered to be beneficial owners. However, in specific circumstances, information about an entity may be reported in lieu of information about a beneficial owner.
• Companies created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial BOI report.
• Companies created or registered in 2024 will have 90 calendar days to file after receiving actual or public notice that its creation or registration is effective.
• Companies created or registered on or after January 1, 2025, will have 30 calendar days to file after receiving actual or public notice that its creation or registration is effective.
• There is no fee for submitting beneficial ownership information to FinCEN.
• A company that is required to report its company’s beneficial ownership information to FinCEN will do so electronically through a secure filing system available via FinCEN’s BOI E-Filing website.

For more information about the new BOI reporting requirements, check out FinCEN’s FAQ.