FinCEN Beneficial Ownership Information (BOI): Reporting Requirement
Beginning January 1, 2024, your business may be required to report “beneficial ownership information” (BOI) to the United States Treasury...
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JANUARY 2024
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
SHARE & PERFORM
One of the many helpful tools that isolved has is an add-on module called Perform. By utilizing Perform, you will have the ability to track your business’s progress through performance management, goal setting, reviews, and more!
It’s not only important for employers to understand how their employees are performing, but it’s equally important for employees to understand where they are doing well and where there is an area for improvement.
There are 6 main tools you can utilize in Perform:
Performance Reviews
These reviews will help your organization monitor and report on performance with flexible cycles that can be tailored to the needs of your organization. Managers and supervisors can use pre-loaded review templates and tailor them to the needs of your organization.
Job History Records
Job history records are maintained, accurate, and accessible for every employee.
360 Feedback Process
This feature enables you to get feedback from peers, leaders, and even customers (or anyone else outside your company).
Nine-box Technology
Identify the career potential of your employees. The nine-box technology helps identify the talent potential of your employees and lets you focus on retaining the leaders and achievers of your organization.
Goal-setting and Monitoring
With this feature, you can set up goals for specific groups, individuals, and the company as a whole. Create workstreams and attach them to goals, or cascade goals down the organization to track the progress of all team members.
A Personalized Dashboard
The dashboard will keep the most important information right where you need it.
isolved Feature of the Month: Perform
Beneficial Ownership Information
Beneficial Ownership Information
By: Debra Fowler, SHRM-CP
Director, Compliance & Policy
Reporting Requirement
Beginning January 1, 2024, your business may be required to report “beneficial ownership information” (BOI) to the United States Treasury Department’s Financial Crimes Enforcement Network (FinCEN). This obligation is a result of the 2021 Corporate Transparency Act (CTA) enacted by Congress, which creates a beneficial ownership information reporting requirement to identify the individual(s) who ultimately own or control a company. The reporting requirement will help the federal government with preventing money laundering, tax fraud, terrorist financing, and any other illicit activities.
The BOI reporting will also assist the federal government in developing a database of information about who owns and operates legal entities in the United States. According to the 2022 Illicit Financing Strategy publication by the U.S. Treasury, the lack of information available to federal law enforcement agencies makes it difficult to investigate shell corporations and other “bad actors.”
Certain entities are required to file BOI reports to satisfy this requirement under the CTA, which are referred to in the FinCEN rules as “reporting companies” and individuals who file paperwork to create or register a business are called “company applicants.” The BOI reporting will require information about the reporting company, the Beneficial Owner, and possibly the company applicant.
Under the CTA, there are two types of reporting companies:
DOMESTIC
Domestic reporting companies include corporations, limited liability companies (LLC’s), and any other entity that is created by filing with the Secretary of State or any similar offices under the law of an individual state.
FOREIGN
Foreign reporting companies are those that are corporations, LLCs, and other entities formed under the law of a foreign country that is registered to do business in any U.S. state or tribal jurisdiction by filing with the Secretary of State or similar office under state law.
Quick Definitions (CTA, 2023)
Businesses subject to this requirement will have to report company applicants to FinCEN if:
Beneficial Owner
Any individual who exercises substantial control over a reporting company or any individual who owns or controls at minimum 25% of the ownership interests of the business.
Company Applicant
a person who either directly files the documents to create an entity or who is primarily responsible for directing or controlling the filing of the relevant document by another person.
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The business is a domestic reporting company created on or after January 1, 2024; or,
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A foreign reporting company first registered to do business in the U.S. on or after January 1, 2024.
If a business was created before January 1 2024, (either a domestic or foreign reporting company), the Company applicant does not need to be reported to FinCEN.
Beneficial Owner Information Reporting
The information businesses will need to provide when meeting this new obligation includes:
Reporting Company (Both Domestic & Foreign):
Beneficial Owner:
Legal business name
Trade name (DBA)
Complete Physical Address
State, Tribal, or Foreign Jurisdiction of Formation (where was the business formed)
Trade name (DBA)
Full Legal Name
Date of Birth
Complete and Current Residential Address
+ Foreign Reporting Companies Only:
State / Tribal Jurisdiction of First Registration
IRS Taxpayer Identification Number (TIN)
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This could be the IRS Employer Identification Number (EIN), or,
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A tax identification number issued by a foreign jurisdiction and the name of the jurisdiction.
Unique identifying number and issuing jurisdiction from, and image of, one of the following non-expired documents
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U.S. passport
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State driver’s license
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Identification document issued by a state, local government, or tribe
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If an individual does not have any of the previous documents, foreign passport
Company Applicant (only if the business is created on or after January 1, 2024)
Full Legal Name
Date of Birth
Complete and Current Residential Address
Unique identifying number and issuing jurisdiction from, and image of, one of the following non-expired documents
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U.S. passport
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State driver’s license
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Identification document issued by a state, local government, or tribe
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If an individual does not have any of the previous documents, foreign passport
Exemptions
There are some businesses that are exempt from the BOI requirements, those include, but are not limited to, banks, tax-exempt organizations, insurance companies, broker-dealers, and businesses that employ 20 or more full-time employees in the U.S. and have more than $5 million in gross receipts/sales.
The full list of exempted businesses can be found here at the FinCEN website: https://www.fincen.gov/boi-faqs
Reporting
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Businesses that were created or registered as a business prior to January 1, 2024, are required to submit their BOI reports no later than January 1, 2025.
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Any business created or registered on or after January 1, 2024, will have 90 days to complete the BOI reporting requirements after receiving notice of their creation or registration.
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Businesses created or registered on or after January 1, 2025, will be required to submit BOI reports no later than 30 days after receiving notice their entity’s creation or registration is effective.
Reporting can happen anytime between January 1, 2024, and January 1, 2025, for existing businesses – you do not have to wait until 2025 to complete the requirement.
Reporting companies will report BOI electronically through the FinCEN website: Beneficial Ownership Information Reporting | FinCEN.gov. Following the completion of BOI reporting, businesses will receive a confirmation receipt indicating the information has been received.
Employers will be obligated to update any changes or corrections to BOI that was previously filed with FinCEN no later than 30 days after the change or correction occurs, including if the business would be changed to exempt under the BOI rules.
Penalties
Businesses that fail to comply with the CTA requirements may be subject to civil penalties of $500 per day and/or criminal penalties of up to $10,000 and/or two (2) years in jail for willful non-compliance.
Access to BOI Information Database
According to the proposed final rules published as of December 22, 2023, by FinCEN, anyone requesting to access BOI will be required to submit justification for their need to access the BOI database information to protect business owners’ sensitive information, and those granted the information may only use the information for purposes permitted by the CTA.
Under the proposed rules, FinCEN would be authorized to disclose BOI to five categories of recipients:
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Federal, State, local, and Tribal government agencies
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Foreign law enforcement agencies, judges, prosecutors, central authorities, and competent authorities, provided requests come through a Federal agency intermediary, and meet certain criteria.
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Financial institutions using BOI to comply with customer due diligence requirements
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Federal functional regulators and other regulatory agencies acting in a supervisory capacity assessing Financial Institutions for due diligence compliance.
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Officers and/or employees of the United State Treasure itself, with job duties requiring inspection of BOI, including tax administration.
The rules also indicate a requirement for strict cybersecurity controls, confidentiality protections, and audit and oversight measures.
Employer Next Steps
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Identify if your business is required to complete BOI reporting before January 1, 2025, or if your business falls under the list of exempted businesses.
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If you are required to complete the BOI reporting requirement, identify who the beneficial owner(s) is/are for your business (those who own or control (directly or indirectly) 25% or more of the company).
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Gather the required information for the Reporting Company, Beneficial Owner, and Company Applicant (if applicable).
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Complete the reporting requirement at the FinCEN website (Beneficial Ownership Information Reporting | FinCEN.gov) on or before January 1, 2025..
You can review the BOI requirements here: LINK
You can also review FinCEN’s Small Business Compliance Guide here: LINK
If you are not sure if your business is required to complete BOI reporting, contact Vida HR today, and we can try to help work through the requirements and identify your obligations.
Need help with completing the BOI reporting requirement?
Contact Lisa Carper, Vida HR's Client Success Manager, to learn about our process and fees for assistance.
HR ALERTS! by Vida HR Knowledge Center
HR Insights: Alcohol at Work
QUESTION:
I want to throw a holiday party for my employees, and I made the decision to allow alcohol to be served. However, I’m concerned what the ramifications would be if an employee drank too much and became intoxicated. What workplace concerns should I be aware of?
There are a few variables in play that affect this question:
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One of the biggest is whether or not this event is mandatory for employees.
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If so, then that would count as time worked, and the consumption of alcoholic drinks would not be recommended, especially if you have a no tolerance policy.
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The next variable is whether or not this event is taking place on company premises.
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Depending on your workers’ compensation insurance, any injuries sustained at the party could result in a legitimate claim.
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As for legislative concerns, employers have a right to restrict the consumption of alcohol in the workplace, as well as being under the influence. If the event is not on workplace premises or during time worked, then the employees are not under any obligation to follow those policies, and must decide themselves to drink responsibly.
Vida HR often recommends including a policy in employer handbooks that addresses these employer- sponsored events. It reaffirms that the events are not mandatory, states the employees must drink responsibly, and in the event that they cannot drive, to call a taxi or driving service to get them home.
If you are a Vida HR client with concerns about employer-sponsored events, you can reach out to your HR business partner for more information.
Employee Highlight: Regina Dyerly
EMPLOYEE HIGHLIGHT
EMPLOYEE HIGHLIGHT
EMPLOYEE HIGHLIGHT
Hello, I'm Regina!
Raised on Long Island, NY, I ventured into Manhattan after college, living there until a year after the devastating events of 9/11. This experience shaped me profoundly, and ultimately led to my leap of faith relocation to Colorado Springs in 2004. While I love life in Colorado, an annual family pilgrimage back to NY for bagels and pizza (and to visit family!) is a tradition we do not miss.
My HR career began as a Recruiter on Wall Street in 1993. Over three decades, I've navigated the ever-changing world of Human Resources – time really does fly when you're having fun! Joining Vida HR in June 2018 was a significant milestone, where I've discovered my true calling as our Chief Operating Officer: empowering businesses and making a meaningful impact, a mission that energizes me daily.
In the Predictive Index, I'm characterized as a 'Captain' – a title that encapsulates my love for facing challenges head-on. A sociable self-starter brimming with innovative ideas, I lead with enthusiasm and a dedication to inspire and elevate my team.
A little about me:
At home, life is lively with my daughter Lyla (13), step-children Thomas (26), Ryan (21), and Nicole (21), my husband Eric, and my rescue dog Molly (4). We share a love for travel, exploring new places with at least two major trips each year and numerous local adventures in our camper. Having visited 44 states, I'm excited to explore the remaining six.
In my ninth year as a Girl Scout Leader, I'm gearing up to hang up my cookie sash this year, passing the torch to a troop of over 50 spirited Girl Scouts. It's been an incredible journey of growth, laughter, and lots of cookies!
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