Beneficial Ownership Information

MAINSTREET BANK

A new federal Beneficial Ownership Information reporting rule, or BOI, takes effect in 2024.

As your financial partner, we are sharing this overview of how you can help yourself to comply. We don’t have a direct role in supporting your compliance. However, practical resources are available to you from the Department of Treasury’s Financial Crimes Enforcement Network, or FinCEN.

What does the BOI reporting rule mean for your small business?

You’ll need to determine if you’re required to comply. There are 23 exempt categories identified by FinCEN, and reviewing this list is a helpful starting point. If you are required to comply, you’ll need to understand what to report and how to do so.

What is the requirement?

Your company may need to identify beneficial owners—any individual who exercises substantial control or who owns or controls at least 25 percent of ownership interests.

Who’s asking for the information?

The BOI reporting rule comes from FinCEN, which combats money laundering, terrorist financing, and other financial crimes. It implements provisions of the Corporate Transparency Act of 2021.

Why is this required, and why should I care?

Criminals frequently use “shell” and “front” companies to hide their identities and assets and to launder money. When they can participate in the U.S. economy illicitly, this puts small businesses that are trying to play by the rules at a disadvantage. This rule is intended to make it harder for criminals to launder money and hide assets.

When does the rule take effect?

The requirements become effective on January 1, 2024, and companies will be able to begin reporting beneficial ownership information to FinCEN at that time.

How can I learn more?

FinCEN has published a Small Entity Compliance Guide to assist the small business community in complying with the beneficial ownership information (BOI) reporting rule. The list of 23 exempt categories appears on page 4. The Guide can help you determine if your business is required to report their beneficial ownership information to FinCEN. You can find it on FinCEN’s BOI reporting webpage. Among other things, the guide:

Describes each of the BOI reporting rule’s provisions in simple, easy-to-read language;
Answers key questions; and
Provides interactive checklists, infographics, and other tools to assist businesses in complying with the BOI reporting rule.

FinCEN Website

While MainStreet Bank cannot direct assist you in complying with the BOI reporting rule, we hope you will find this brief overview and these resources helpful. If you have further questions, you should reach out to FinCEN or contact your attorney.

Looking for more Industry Expertise?

Visit our Resources hub to discover the latest industry insights and access helpful guides for managing your account. Whether you’re looking for tips on how to manage your finances or make the most of your digital banking tools, we’ve got you covered.

Resources