Boy, oh BOI!
A New Random Reporting Requirement
Ever heard of the branch of government called FinCEN? Neither had we! It’s the Financial Crimes Enforcement Network. And to make sure there are no financial crimes happening, they want to track who owns and controls all the small corporations and LLCs in the U.S.
A New Random Reporting Requirement
Ever heard of the branch of government called FinCEN? Neither had we! It’s the Financial Crimes Enforcement Network. And to make sure there are no financial crimes happening, they want to track who owns and controls all the small corporations and LLCs in the U.S.
They call this “Beneficial Owner Information” or BOI. It’s free to file, and expensive if you’re supposed to file and don’t, so read on to find out a) if you should file, b) when you should file, c) what you should file, and d) how you should file.
Should you file?If your organization is a legal entity formed in the US, then you may need to file. Since that’s most businesses, it’s easier to list the exceptions that don’t need to file BOI. You need to file unless you’re:
- a bank or credit union
- tax-exempt
- “Large”, i.e. have more than 20 employees and $5 million in revenue
- Inactive
- A sole proprietorship (because those don’t need to “form” through a Secretary of State).
There are more exceptions, definitions, and details galore in this Compliance Guide.
When should you file?If your entity formed before January 1, 2024, then you have until January 1, 2025 to file.
If your entity formed after January 1, 2024, then you have 90 days from when you formed to file. That will be good until January 1, 2025 – after that, new entities will have 30 days from formation to file.
If you plan to dissolve an entity formed before January 1, 2024, do so before January 1, 2025 if you do not intend on filing.
After you’ve made your initial filing, you’ll also need to file again within 30 days when there’s a change in your BOI. We’ll get to that!
What should you file?The information that FinCEN is looking for is about individuals (actual people) who are “beneficial owners”: people who exercise substantial control over a company OR own or control at least 25 percent of a company.
The people who match this description are most likely to be the company’s CEO(s) or general manager(s), any other senior officers, and its board of directors.
Bonus: if you filed for formation on or after January 1, 2024, you also have to file information on the person who did the filing, and also maybe the person who prepared the filing documents. These are called “Company Applicants”. No more than two people, though!
The information needed is the following:
About the Company:
- Full legal name
- Any trade name or “doing business as” (DBA) name
- U.S. address
- State, Tribal, or foreign jurisdiction of formation
- IRS Employer Identification Number (EIN)
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About Each Beneficial Owner and any Company Applicant(s)
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OR…
If any of this information changes, you have 30 days from the change to file an update. So, if there is a change in the company’s legal name, DBA name, or address, or if the there is a change in beneficial owners (i.e. CEO or board members), or if one of those beneficial owners has a new legal name, address, or ID – file an update!
How Should You File?You are required to file electronically. FinCEN has a portal here: https://boiefiling.fincen.gov/fileboir. This gives you the option to either prepare a report off-line using Adobe and file when it is complete, which also makes it easier to prepare and submit updates and corrections, or to file entirely on the web. Either way you can get a transcript of what you submitted.
If you are a member of more than one board of companies that need to file FinCEN reports, it might make sense for you to get a FinCEN ID. You can do that here: https://fincenid.fincen.gov/landing.
Good luck! This is new to everyone, so we’re all figuring it out as we go!
More ResourcesSee the resources being compiled by the US Federation of Worker Co-ops and Democracy at Work Institute: https://www.usworker.coop/blog/corporate-transparency-act-beneficial-ownership-information-program/.
- If an individual has obtained a “FinCEN identifier” you may include it in your report instead of the above information.
If any of this information changes, you have 30 days from the change to file an update. So, if there is a change in the company’s legal name, DBA name, or address, or if the there is a change in beneficial owners (i.e. CEO or board members), or if one of those beneficial owners has a new legal name, address, or ID – file an update!
How Should You File?You are required to file electronically. FinCEN has a portal here: https://boiefiling.fincen.gov/fileboir. This gives you the option to either prepare a report off-line using Adobe and file when it is complete, which also makes it easier to prepare and submit updates and corrections, or to file entirely on the web. Either way you can get a transcript of what you submitted.
If you are a member of more than one board of companies that need to file FinCEN reports, it might make sense for you to get a FinCEN ID. You can do that here: https://fincenid.fincen.gov/landing.
Good luck! This is new to everyone, so we’re all figuring it out as we go!
More ResourcesSee the resources being compiled by the US Federation of Worker Co-ops and Democracy at Work Institute: https://www.usworker.coop/blog/corporate-transparency-act-beneficial-ownership-information-program/.
