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  • Writer's pictureSteve Spiech

Navigating the FinCEN Beneficial Ownership Information Reporting Rule

There is a new regulation affecting many companies registered to do business in the U.S. called the Financial Crimes Enforcement Network (FinCEN) Beneficial Ownership Information (BOI) Reporting Rule.  The Rule, enacted under the Corporate Transparency Act (CTA), is aimed at enhancing transparency and combating financial crimes.  It requires business entities to disclose information to FinCEN about individuals who directly or indirectly control them.


We want to help you understand this requirement by addressing these fundamental questions:


  • What businesses are required to file?

  • Are any businesses exempt from filing?

  • What is the deadline for filing?

  • How do I file?

  • How long does it take to file?



What businesses are required to file?


FinCEN Beneficial Ownership Information Reporting applies to two types of reporting companies:

  • Domestic - Corporations, Limited Liability Companies (LLCs), and any other entities created by the filing of a document with a secretary of state or any similar office in the United States.  This excludes sole proprietorships, general partnerships, and trusts if they were not created by filing a document with a secretary of state or any similar office in the United States.

  • Foreign - Entities 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.



Are any businesses exempt from filing?


Yes.  While FinCEN BOI Reporting casts a wide net, there are 23 identified categories of business entities exempt from BOI filing.  FinCEN includes a table and checklist on its website for each of the 23 exemptions.  Companies should carefully review the criteria and/or consult their attorney or accountant to help determine whether they are truly exempt.


  • Securities reporting issuer

  • Governmental authority

  • Bank

  • Credit union

  • Depository institution holding company

  • Money services business

  • Broker or dealer in securities

  • Securities exchange or clearing agency

  • Other Exchange Act registered entity

  • Investment company or investment adviser

  • Venture capital fund adviser

  • Insurance company

  • State-licensed insurance producer

  • Commodity Exchange Act registered entity

  • Accounting firm

  • Public utility

  • Financial market utility

  • Pooled investment vehicle

  • Tax-exempt entity

  • Entity assisting a tax-exempt entity

  • Large operating company

  • Subsidiary of certain exempt entities

  • Inactive entity

 

Companies with more than 20 full time employees and more than $5,000,000 in gross receipts or sales reported on their tax return may qualify for the Large operating company exemption and should check the FinCEN website to review the specific criteria for exemption.



What is the deadline for filing?


Here's what you need to know about the deadline for filing Beneficial Ownership Information:

  • Business entities formed before January 1, 2024, have until January 1, 2025, to file their initial BOI report.

  • Business entities formed on or after January 1, 2024, have 90 calendar days after their formation to file their initial BOI report.

  • In 2025, business entities formed on or after January 1, 2025, will have 30 calendar days after their formation to file their initial BOI report.


Compliance with FinCEN BOI Reporting is not a one-time obligation. After your initial filing you will need to update your Beneficial Ownership Information if any changes occur within 30 days of the change.  For example, an address or company leadership change will require an update.  There are penalties for late or missed filings.



How do I file?


The FinCEN BOI e-filing website for reporting Beneficial Ownership Information is located at https://boiefiling.fincen.gov.  After gathering the information needed you can go through the filing process yourself, ask your accountant or attorney to help you, or you can use one of the new online services available to do your filing.  May sure you vet the online service first for legitimacy and experience if you decide to go that route.  There is no fee for filing yourself on the FinCEN website.



How long does it take to file?


We used the FinCEN website for filing.  It gives you an option to file using a PDF offline at your own pace or to file online in one sitting.  We chose the online filing method.  The filing for Finance Burger was pretty simple – only taking 25 minutes.  The system has a nice feature in that when you hover over an entry item an explanation of the items pops up.


We hope this gives you a basic understanding of FinCEN Beneficial Ownership Information reporting and how it could apply to your business.  Your business attorney and / or accountant will be good resources for advice, but in the end, you will need to gather the information needed for filing.  You can also refer to the following links for more information:


P.S. Tap the photo



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