Beneficial Ownership Information Reports: A New Compliance Challenge for Kentucky Businesses

The Corporate Transparency Act (CTA), enacted in 2021, ushered in a new era of transparency for corporations, LLCs, and other business entities. A central component of this legislation is the requirement for businesses to file Beneficial Ownership Information (BOI) reports with the Financial Crimes Enforcement Network (FinCEN). This blog post will provide an overview of the BOI reporting requirements and highlight key considerations for Kentucky businesses.

What is a Beneficial Ownership Information Report?

A BOI report discloses the identities of individuals who ultimately own or control a legal entity. The goal of this reporting is to deter money laundering, terrorist financing, and other financial crimes by making it more difficult for anonymous shell companies to operate.

Who Must File a BOI Report?

Most corporations, LLCs, and other entities formed in the United States are required to file a BOI report. However, there are exceptions for certain types of businesses, such as public companies, banks, and credit unions.

What Information is Required?

The BOI report requires information about the company, including its legal name, address, and Employer Identification Number (EIN). Most importantly, it demands details about the company's beneficial owners and company applicants. Beneficial owners are individuals who exercise substantial ownership or control over the company. Company applicants are those who form the company or are responsible for filing its formation documents.

For each beneficial owner and company applicant, the report must include:

• Full legal name

• Date of birth

• Residential address

• Unique identifying number (such as a passport or driver's license number)  

Deadlines and Penalties

The deadline for filing a BOI report depends on when the company was formed:

• Companies formed before January 1, 2024: Must file by the end of 2024.

• Companies formed on or after January 1, 2024: Must file within 30 days of formation.

Failure to comply with the BOI reporting requirements can result in significant penalties, including civil and criminal fines.

How Can a Kentucky Attorney Help?

Navigating the complexities of BOI reporting can be challenging for businesses. A knowledgeable Kentucky attorney can provide valuable guidance, including:

• Determining if your business is required to file a BOI report

• Assisting in identifying beneficial owners and company applicants

• Preparing and filing the BOI report

• Advising on potential risks and penalties for non-compliance

The BOI reporting requirements represent a significant change for businesses. By understanding the rules and seeking professional assistance, Kentucky companies can ensure compliance and mitigate potential risks.

Disclaimer: This blog post is intended for informational purposes only and does not constitute legal advice. Please consult with an attorney for advice regarding your specific situation.  

Kloeker Law is ready to assist you with your BOI reporting obligations. Contact us today for a consultation.

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