The Beneficial Ownership Information program, requires reporting on business owners and individuals who exercise significant control over a business. For businesses that are not cooperatives, this is a relatively straightforward reporting requirement for the owner(s) of the business. Because cooperatives have a broad-based ownership model, it is not clear currently who exactly within the business ownership needs to report. For worker cooperatives, this can be especially tricky to understand.
The law requires reporting from “Beneficial owners”, with the following definition:
any individual who, directly or indirectly, either:
- Exercises substantial control over a reporting company, or
- Owns or controls at least 25% of the ownership interests of a reporting company.
Help! What do we do? Is this an emergency?
The BOI program will begin to be enacted in 2024, and it will affect most small businesses in the U.S. We encourage all businesses to begin talking with their legal and accounting partners. Here are a few key facts:
- NEW businesses that incorporate on or after Jan 1, 2024 must be particularly attentive, as they only have 90 calendar days to report starting from the date of incorporation. Businesses created after Jan 1, 2025 will only have 30 calendar days to file.
- EXISTING businesses have until Jan 1, 2025 to report. While it’s important to understand this legislation and report to the federal government, you have until Jan 2025 to do so.
The USFWC and DAWI will be putting together a webinar in early 2024 to review the requirement, and how it relates to worker cooperatives. Before then, we will be sure to share information from trusted partners on this issue.
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