Beneficial Ownership Information - New Reporting Requirements

The Department of Treasury is requiring Beneficial Ownership Information reports to be filed beginning January 1, 2024.  This requirement is born out of the Corporate Transparency Act of 2021 to bulwark against financial crimes.

We advise every statutory entity evaluate its compliance requirements with respect to this Act and related rules to avoid potential criminal and civil penalties for violations can be up to $500 per day not filed and/or $10,000 and two years imprisonment.

Fact Sheet

Do I have to File?

Unless you are exempt, you more than likely have to file a BOI with FinCen by the due date, based on when your entity was created.

Deadlines

Entity created:

1. Prior to January 1, 2024 - by January 1, 2025
2. After January 1, 2024 to December 31 - 90 calendar days from creation date
3. After January 1, 2024 - 30 calendar days from creation date

Ownership Change Occurs:

1. Within 30 calendar days

Common Exemptions

• Exempt Organization
• Non Statutory Entity (not an LLC or Corporation)
• Large Operating Entity (meeting all 6 criteria)
• 21 other less common exemptions

Large Operating Entities

(must meet all criteria)

1. More than 20 full time employees working in the United States
2. Maintains a physical operating presence in the US
3. Files either of the following federal income tax returns (1120, 1120-S or 1065) showing more than $5,000,000 in gross receipts (consolidated if applicable) or sales, net of any sources outside of the United States.

Other Exemptions

Most of the other exemptions require a detailed analysis of your particular operating structure.  A full list of exempt statutory entities can be found below.

1. Securities reporting issuer
2. Governmental authority
3. Bank
4. Credit union
5. Depository institution holding company
6. Money services business
7. Broker or dealer in securities
8. Securities exchange or clearing agency
9. Other Exchange Act registered entity
10. Investment company or investment adviser
11. Venture capital fund adviser
12. Insurance company
13. State-licensed insurance producer
14. Commodity Exchange Act registered entity
15. Accounting firms (SOX Registered)
16. Public utility
17. Financial market utility
18. Pooled investment vehicle
19. Tax-exempt entity
20. Entity assisting a tax-exempt entity
21. Large operating company
22. Subsidiary of certain exempt entities
23. Inactive entity

How do I File

FinCEN has provided a compliance guide and dedicated a web page for FAQs and News Updates to assist you in determining:

• Who are a beneficial owners
• Whether your company has to report it's company applicants
• What "specific" information is needed to be reported
• When to file initial reports?
• When to report changes and correct inaccuracies

As of the writing of this post, FinCEN has not provided for the ability for Companies to begin the process of filing, which will open on January 1, 2025.  The compliance guide above contains a checklist for to assist you in preparing information to be ready to file.

Required Information Checklist

Below is a list that can also be found in the compliance guide, available on theFinCen BOI website.  It is not intended to be conclusive and you should review your individual requirements on a case by case basis and refer to any changes requested by FinCEN.

Reporting Company

… Full legal name
… Any trade name or “doing business as” (DBA) name
» Report all trade names or DBAs.
… Complete current U.S. address
» Report the address of the principal place of business in United States, or, if the reporting company’s principal place of business is not in the United States, the primary location in the United States where the company conducts business.
… State, Tribal, or foreign jurisdiction of formation
… For a foreign reporting company only, State or Tribal jurisdiction of first registration
… Internal Revenue Service (IRS) Taxpayer Identification Number (TIN) (including an Employer Identification Number (EIN))
» If a foreign reporting company has not been issued a TIN, report a tax identification number issued by a foreign jurisdiction and the name of such jurisdiction.

Each Beneficial Owner and Company Applicant
Not all reporting companies are required to report information about company applicants. See Chapter 3 for assistance in identifying whether your company is required to report company applicant information.

… Full legal name
… Date of birth
… Complete current address
» Report the individual’s residential street address, except for company applicants who form or register a company in the course of their business, such as paralegals. For such individuals, report the business street address. The address is not required to be in the United States.
… Unique identifying number and issuing jurisdiction from, and image of, one of the following non-expired documents:
» U.S. passport
» State driver’s license
» Identification document issued by a state, local government, or tribe
» If an individual does not have any of the previous documents, foreign passport