The Beneficial Ownership Information Report (BOIR)

There is a new federal reporting requirement for all corporations and limited liability companies. In short, such companies must now register themselves to report who the beneficial owners of said companies are. This is intended to further policies related to financial crimes committed through sham companies.

In 2021, Congress passed the Corporate Transparency Act on a bipartisan basis. This law creates a new beneficial ownership information reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures. Beneficial ownership information refers to identifying information about the individuals who directly or indirectly own or control a company. The Financial Crimes Enforcement Network, U.S. Department of the Treasury (“FinCEN”) launched the BOI E-Filing website for reporting beneficial ownership information (https://boiefiling.fincen.gov) on January 1, 2024.

• A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial BOI report.
• A reporting company created or registered in 2024 will have 90 calendar days to file after receiving actual or public notice that its creation or registration is effective.
• A reporting company created or registered on or after January 1, 2025, will have 30 calendar days to file after receiving actual or public notice that its creation or registration is effective.

Companies required to report are called reporting companies. There are two types of reporting companies:

• Domestic reporting companies are corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States.
• Foreign reporting companies are entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office.

There are 23 types of entities that are exempt from the beneficial ownership information reporting requirements. These entities include publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies.  The following table summarizes the 23 exemptions:

To file the report, use this website: https://boiefiling.fincen.gov. Have ready an image of your driver’s license in .jpg, .png, or .pdf form and not exceeding 4 MB in size. In the interest of best understanding this, I filed reports for my own companies. Given my experience, this seems a straightforward process for nonexempt, domestic companies that a small business owner can independently address, without legal assistance. Foreign companies have additional fields to answer. The form also had an option for claiming to be an exempt company. I recommend that the owners of business entities who do not believe they are exempt timely file this form and save the transcript in their own company records.

If interested, here is a description of how the process was for me to register my domestic companies:

First, I was required to indicate I was filing an “Initial Report.” I then selected the option to receive a FinCEN ID. I entered the reporting company legal name and, for my companies with alternate names, entered those. I had the option of adding additional alternate names, if applicable. I then selected whether I used an SSN/ITIN or EIN for the business and entered my federal tax ID number without any dashes or spaces. I ignored options for foreign (non-U.S.) company information because my companies are domestic (U.S.-based). Instead, I selected that my Country/Jurisdiction of formation was the United States of America. I selected the State in which the company was formed and entered my company address. In Question 16, I selected that my Company was an “Existing reporting company” and received a warning that certain fields in the form would be “cleared” if continued as an existing reporting company, which I accepted. I skipped Part II questions and moved forward to Part III questions, skipping ahead to Question 38, where I entered my personal information as the owner of the business. I entered my Driver’s License information as my personal identification. I then dragged and dropped an image of my driver’s license into the form. If another beneficial owner is to be added, there is a button called, “Add Beneficial Owner” on this page for that purpose. I then moved to the next screen where I digitally signed and submitted the application, with the last step being to click “SUBMIT BOIR”. The conformation page included my BOIR ID, my FinCEN ID, and a submission tracking number. Therefore, I saved this confirmation page in my company documents. I also clicked “DOWNLOAD TRANSCRIPT” and received a .pdf confirmation of the submission, which included the details of my submission, as well as the BOIR ID, my FinCEN ID, and a submission tracking number. This I also filed with my company documents.

THE INFORMATION CONTAINED HEREIN IS GENERAL INFORMATION, IS NOT LEGAL ADVICE, AND DOES NOT CREATE AN ATTORNEY-CLIENT RELATIONSHIP. YOUR SPECIFIC FACTS AND CIRCUMSTANCES MUST BE CAREFULLY REVIEWED WITH A RETAINED ATTORNEY PRIOR TO REACHING LEGAL CONCLUSIONS.

You may contact Nicole at (908)801-5434 or info@nlvlegal.com. For more information, visit www.voigtlawoffice.com.