Today we will be talking about the BOI FinCEN reporting requirements as a result of the Corporate Transparency Act of 2021. Most registered businesses operating within the United States need to complete a BOI FinCEN report.

What Is a BOI FinCEN Filing?

A FinCEN Beneficial Ownership Information filing is a report that companies must submit to the Financial Crimes Enforcement Network (also known as FinCEN) to disclose those who have any ownership or substantial control over your company.

The main goal of this new reporting is to prevent any foreign entities from anonymously participating in and potentially harming the American economy as well as preventing them from posing any threats to National Security.

Who Must File?

BOI FinCEN reports must be completed by both domestic and foreign reporting companies. These are:

  • Corporations
  • LLCs
  • Any other entity created by the filing of a document with a Secretary of State or similar office within the United States

Non-Reporting Companies

Non-reporting companies include entities that are not created by filing with a Secretary of State. For example:

  • Sole proprietorships
  • Certain trusts

These are not considered reporting entities because they aren’t required to register with their associated Secretary of State’s office.

Exempt Companies

There are some types of companies that are excluded from this filing requirement, however the list is very limited. It includes companies such as:

  • Banks
  • Credit unions
  • Tax-exempt entities
  • Public utilities
  • Publicly traded companies
  • Certain large companies

If you aren’t sure if your company is required to complete this filing, please reach out to our office and we will gladly help you determine whether or not a report is necessary.

Filing Deadlines

The deadlines vary based on when your company was created or registered:

  • Created before January 1, 2024: File by January 1, 2025
  • Created after January 1, 2024: 90 calendar days to file after receiving notice that registration is effective
  • Created after January 1, 2025: Only 30 days after receiving notice that registration was successful

Penalties for Non-Compliance

Any willful failure to complete this report or any willful and intentional misrepresentation on the report may result in civil or criminal penalties including:

  • Fine of $500 per day
  • Up to two years in prison

Who Are Beneficial Owners?

First, identify all beneficial owners of your company. That’s any individual who either directly or indirectly:

  • Owns or controls at least 25% of the ownership interests of your company, OR
  • Exercises substantial control over the company

Basically, any owner that has the ability to make changes to the company structure or make big managerial decisions on behalf of the company needs to be included.

Substantial Control Criteria

An individual exercises substantial control over a reporting company if they meet any of these four criteria:

  1. They are a senior officer
  2. They have authority to appoint or remove certain officers or a majority of directors of the company
  3. They’re considered an important decision maker
  4. They have any other form of substantial control over the reporting company

Company Applicant

The company applicant (the individual who directly filed the documents that created or first registered the reporting company) is only required to be reported if the company was created on or after January 1, 2024.

FinCEN Identifier Option

Individuals have the option to apply for a FinCEN ID, which is a unique ID number FinCEN will issue to simplify the reporting process. This is not a requirement, but it can potentially speed up your filing.

Each beneficial owner may only receive one FinCEN identifier. Then whoever is completing the filing can put down the individual’s FinCEN ID instead of typing out all the required personal info since it’s already registered with the organization.

Applications for a FinCEN identifier can be completed at fincen.gov.

Required Information for Your Company

Your reporting company must provide the following information about itself:

  • Legal name
  • Any trade or DBA name
  • The complete US address
  • The state, tribal, or foreign jurisdiction of formation
  • The taxpayer identification number (TIN) or foreign tax ID

Required Information for Beneficial Owners

The following information must be provided for each beneficial owner and, if applicable, any company applicants:

  • Name
  • Date of birth
  • Address
  • Identifying number and issuing jurisdiction from a non-expired:
    • Driver’s license
    • US passport
    • Identification document issued by a state, local government, or Indian tribe

A foreign passport may be used if none of the other options are available.

Regardless of which document you choose to register with, a scanned copy is required to be included with the filing.

Get Help

If you need assistance with your BOI FinCEN filing or have questions about whether your business needs to file, please reach out to our office. We’re here to help ensure your compliance with this important reporting requirement.