What it is Beneficial Ownership Information (BOI) and why is it important?

Knowing what it is Beneficial Ownership Information (BOI) is crucial in the fight against financial crimes, such as money laundering and the financing of illegal practices. In this material we will seek to clarify what the BOI is, its importance and how companies must adapt to the regulations proposed by the Financial Crimes Enforcement Network (FinCEN).

What it is Beneficial Ownership Information (BOI)?

Beneficial Ownership refers to natural people who directly or indirectly own or control a legal entity, such as a company or foundation. This information is vital to ensure the transparency of business and financial activities.

This process seeks to provide transparency and prevent illicit practices by providing crucial information about the ownership structure of companies.

Why is BOI Important?

This practice enables trust in financial markets, protecting investors and interested parties.

FinCEN, the body responsible for financial regulation in the United States, has established specific requirements for the collection and maintenance of Beneficial Ownership information. Below, we highlight some main points:

Data Collection: Entities must collect accurate and complete information about ultimate beneficiaries.

Reports and Updates: Companies must report this information to FinCEN in a timely manner and keep the data up to date.

Any changes to the ownership structure must be communicated promptly.

Data Protection: Beneficial Ownership information must be stored securely, protecting against unauthorized access.

FinCEN guarantees the confidentiality of information, using it only for regulatory and investigative purposes.

Who is considered a Beneficial Owner?

Beneficial Owners are individuals who own 25% or more of an entity or exercise significant control over it.

Which entities need to report a BOI?

All legal entities, including corporations, LLCs, and other forms of businesses, except for specific exceptions such as banks and non-profit organizations.

How does FinCEN use this information?

The information is used to strengthen compliance with anti-money laundering and terrorist financing laws, facilitating the identification and investigation of suspicious activity.

Conclusion

Compliance with Beneficial Ownership Information requirements is essential to the transparency and integrity of global financial markets. Companies and legal entities must be aware of FinCEN regulations and ensure that their information collection, storage and reporting practices comply with current legislation.

By following these guidelines and implementing appropriate compliance practices, companies can help promote a safer and more transparent financial environment.

Source: https://fincen.gov/boi-faqs


Written by Marcos Ferreira, Content Analyst at Drummond Advisors


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