Here it comes . . . a new reporting requirement applies to many small companies formed under the laws of U.S. jurisdictions. It also applies to some non-U.S. companies qualified to do business in the United States.  The new law calls for the disclosure of beneficial ownership information (“BOI”)   – – which amounts to “who is the ultimate owner of securities?” rather than just the record owner. The new law focuses on those “individuals who exercise substantial control over the company.” The rule includes guidance on what constitutes “substantial control”.

This is a serious reporting obligation. The law is administered by the Treasury Department’s Financial Crimes Enforcement Network, which summarized the new rule this way:  “Starting January 1, 2024, many companies will be required to report information to the U.S. government about who ultimately owns and controls them.” .

Often, small business are exempted from regulatory schemes, but not so with this new BOI law; only small businesses must comply.  Larger companies – – ones that (A) have more than 20 employees in the U.S and (B) have a physical office in the U.S., and (C) have more than $5 million in gross receipts or sales in the U.S. are exempt from the reporting requirements.

For many clients of Laberee Law, the new BOI rules will not require any action. But those with non-U.S. owners – – direct or indirect – – must consider the new law’s affect on them.  The Small Business Compliance Guide can help  and Laberee Law is happy to help.