The BOI Filing Platform FAQs are designed as a guide. Please note that the information shared here is for clarification purposes only and does not alter any legal obligations stipulated by statutes or regulations. For comprehensive details, please refer to the Beneficial Ownership Information Reporting Rule at fincen.gov/boi
This term refers to individuals that have either 25% or more ownership in a U.S. small business or substantial control in the business, which is the ability to make important decisions for the company. FinCEN requires reporting personal information about individuals who either directly or indirectly own or control a company in the new Corporate Transparency Act. These reports are called Beneficial Ownership Information reports.
In 2021, a bipartisan effort in Congress led to the passage of the Corporate Transparency Act. This legislation introduces a new obligation for companies to report beneficial ownership information. The purpose is to support the U.S. government’s commitment to making it more challenging for wrongdoers to conceal or profit from their dishonest gains through shell companies or complex ownership structures. The Corporate Transparency Act aims to build a confidential database that the Federal Government can use to discover all individuals related to a reporting company.
Under the Corporate Transparency Act, various authorities, including Federal, State, local, and Tribal officials, and select foreign officials submitting requests through a U.S. Federal government agency, can obtain beneficial ownership information. Private citizens cannot access this database and it is not public information.
This access is granted for activities authorized in national security, intelligence, and law enforcement. Financial institutions may also access such information in specific situations, provided the reporting company consents.
Additionally, regulatory bodies overseeing these financial institutions will have access during their supervision processes.
FinCEN is in the process of formulating rules to govern the access and handling of beneficial ownership information. All reported information will be securely stored in a non-public database, utilizing robust information security measures commonly employed in the Federal government for safeguarding sensitive yet unclassified information systems at the highest security levels.
FinCEN will collaborate closely with authorized parties to ensure they comprehend their roles and responsibilities, guaranteeing that the information is used solely for authorized purposes and handled in a manner that prioritizes security and confidentiality.
Companies will need to start submitting beneficial ownership information reports to FinCEN after January 1, 2024. FinCEN will not process any beneficial ownership information reports until January 1, 2024.
Starting January 1, 2024, FinCEN will initiate the acceptance of beneficial ownership information reports.
If your firm invites you to FincenFetch, you will pay your firm for the filing service they provide.
If your firm invites you to FincenFetch, you will compete the report with the link they provide.
Companies obligated to report are called “reporting companies.” Your company is a reporting company unless you have an exemption. This includes LLCs, Corporations, or any other entity created by filing a document with a U.S. State.
There are some exemptions. The most common is the Large Operating Company Exemption. This exemption requires your business to have BOTH 21 or more full-time employees and $5 million or more in sales on your last business tax return. The remaining exemptions are more rare and mostly include highly regulated companies.
To check if you need to file, use the FincenFetch Exemption tool to assess if your business qualifies for an exemption.
There are two categories of reporting companies:
23 distinct types of entities are exempt from the reporting obligations for beneficial ownership information. This includes publicly traded companies that meet specific requirements, numerous nonprofits, and certain large operating companies.
The following list provides an overview of the 23 exemptions:
Before concluding that your company is exempt, carefully examine the criteria associated with each exemption. Alternatively, you can use the Exemption Tool on FincenFetch.
The status depends on the entity type and the manner of its establishment:
Entities must also evaluate whether any exemptions to reporting requirements are applicable. For instance, a foundation may not be obliged to report beneficial ownership information to FinCEN if it qualifies for the tax-exempt entity exemption.
Click Here to use the FincenFetch Exemption tool to check if your business qualifies for any of the above exemptions.
No, the act of registering a trust with a court of law to establish the court’s jurisdiction over potential disputes related to the trust does not confer reporting company status upon the trust. If the trust is registered with a Secretary of State, however, it is likely a reporting company.
A beneficial owner is an individual who, either directly or indirectly:
An individual can exercise substantial control through four distinct avenues. An individual is deemed to exercise substantial control if they fall into any of the following categories:
An individual is an important decision-maker with substantial control when they are involved in decisions concerning any of the following –
ANY individual who guides, determines, or significantly influences these crucial decisions is considered to exercise substantial control over the reporting company.
Ownership interest typically refers to an agreement that outlines ownership rights within the reporting company. Examples of ownership interests encompass various forms, such as equity shares, stock, voting rights, or any other mechanism employed to signify ownership. When calculating the 25% threshold to see if an individual is a beneficial owner, you must include ANY form of ownership.
There are five situations where an individual, who would typically be considered a beneficial owner of a reporting company, qualifies for an exception. These apply to minors, custodians or nominees, employees assigned to specific tasks who are not officers, those who have future ownership such as inheritance, and creditors who can only obtain ownership based on a future collection of a potential debt. In these instances, the reporting company is not obligated to report that individual as a beneficial owner to FinCEN.
Accountants and lawyers typically do not meet the criteria for being beneficial owners. However, this determination may hinge on the nature of their work. These individuals are often company applicants if they help set up the entity, which is covered in a later section.
When a beneficial owner exclusively holds or controls their ownership interests in a reporting company through various exempt entities, the reporting company can provide FinCEN with the names of all these exempt entities instead of the individual beneficial owner’s details.
It’s important to note that this specific rule does not apply if an individual owns or controls ownership interests in a reporting company through a combination of exempt and non-exempt entities. In such instances, the reporting company must report the individual as a beneficial owner (unless an exception applies), while the exempt companies do not need to be listed.
The unaffiliated company itself cannot qualify as a beneficial owner of the reporting company since a beneficial owner must be an individual.
Any individuals exerting substantial control over the reporting company through the unaffiliated company must be reported as beneficial owners.However, individuals who lack influence over important decisions made by the reporting company and do not exercise substantial control may not be deemed beneficial owners of the reporting company.
No, not necessarily.Determining whether a specific director meets any of these criteria is a matter the reporting company must assess on a director-by-director basis.
The status depends on the circumstances. A reporting company’s “partnership representative,” or “tax matters partner,” is not automatically considered a beneficial owner of the reporting company. However, such an individual may qualify as a beneficial owner if they exercise substantial control over the reporting company or own or control at least 25 percent of the company’s ownership interests.
The reporting obligation for company applicants applies exclusively to reporting companies established or registered on or after January 1, 2024. Companies formed prior to 2024 do not need to share their company application information.
A company obligated to report its company applicants will typically have up to two individuals who may qualify as company applicants:
They will only submit a maximum of two company applicants. Company applicants are always individuals and never companies.
Not all reporting companies are obligated to disclose their company applicants to FinCEN. The requirement to report company applicants applies only to a reporting company established or registered to do business in the United States on or after January 1, 2024. Companies formed before 2024 do NOT need to report their company applicants.
The status of an accountant or lawyer as a company applicant hinges on their role in filing the document that establishes or registers a reporting company. Often, company applicants may be affiliated with a business formation service or law firm.
An accountant or lawyer may be designated as a company applicant if they directly submit the document creating or registering the reporting company. If multiple individuals are involved in the filing, an accountant or lawyer may be a company applicant if they are primarily responsible for directing or controlling the filing.
For example, an attorney at a law firm providing business formation services may oversee the preparation and filing of a reporting company’s incorporation documents. If a paralegal directly files the documents at the attorney’s direction, both the attorney and the paralegal are considered company applicants for the reporting company.
No, a company applicant cannot be removed from a BOI report even if they no longer have a relationship with the reporting company. For reporting companies created on or after January 1, 2024, company applicant information must be reported in the initial BOI report, and updates are not required if the relationship changes.
Yes, the information to be disclosed depends on when the company was created or registered:
A reporting company must disclose:
Additionally, the reporting company must indicate whether it is filing an initial report, a correction, or an update of a prior report.
For each individual classified as a beneficial owner, a reporting company is required to provide:
For each individual designated as a company applicant, a reporting company must disclose:
If the company applicant is engaged in corporate formation, such as working as an attorney or corporate formation agent, the reporting company must report the company applicant’s business address. Otherwise, the reporting company must report the residential address of the company applicant.
The reporting requirement requires submitting only the following acceptable forms of identification:
No, there is no annual reporting requirement. Reporting companies must file an initial BOI report and submit updated or corrected BOI reports as necessary within 30 days of any change to the company information or the information of any beneficial owner. This includes address changes.
Failure to meet these deadlines may result in FinCEN penalties.
No, a parent company cannot file a single BOI report on behalf of its group of companies. Each company meeting the definition of a reporting company must independently file its own BOI report.
To obtain a TIN, specifically an Employer Identification Number (E.I.N.), within 30 days for timely BOI reporting, the Internal Revenue Service (I.R.S.) offers a free online application at irs.gov.
Foreign entities without an Individual Taxpayer Identification Number (ITIN) will need to request an EIN with a paper filing process that takes about 8 weeks. These companies should complete these filings shortly after formation to meet the 90 day requirement in 2024 for new entities.
Reporting companies not subject to U.S. corporate income tax may report a foreign tax identification number and the relevant jurisdiction’s name instead of an E.I.N. or TIN.
No, an initial BOI report should only include beneficial owners as of the filing date. Historical beneficial owners need not be included. Reporting companies must promptly notify FinCEN of changes to beneficial owners through updated reports within 30 days of any change.
In the event of any changes to the required information about a reporting company or its beneficial owners in a filed beneficial ownership information report, an updated report must be filed within 30 days of the change to avoid penalties. No updated report is required for changes to previously reported information about a company applicant.
Several circumstances necessitate filing an updated beneficial ownership information report. Examples include:
Stay informed about these triggers to ensure timely updates and compliance with reporting requirements by subscribing to our updates in the footer of the website.
Discovering an inaccuracy in a beneficial ownership information report requires prompt correction. Follow these steps:
Maintain accuracy in your beneficial ownership information report by promptly addressing any discrepancies.
If a reporting company, having already filed a beneficial ownership information report, becomes exempt, it must submit an updated report. This revised report should:
FinCEN ensures reporting companies comprehend and fulfill their obligations related to reporting, updating, and correcting beneficial ownership information. Acknowledging the newness of this requirement:
Stay informed and comply with reporting standards to avoid legal consequences.
Entities are eligible for the tax-exempt entity exemption if they meet any of these four criteria:
Ensure your entity meets one of these criteria to claim the tax-exempt entity exemption.
Entities meet the criteria for the inactive entity exemption if all six of these conditions are satisfied:
Your entity may only qualify for the inactive entity exemption by fulfilling all of these conditions.
An entity qualifies for the subsidiary exemption if the following applies: The entity’s ownership interests are 100% controlled or wholly owned, directly or indirectly, by any of these types of exempt entities:
No, the large operating company exemption stipulates that the entity must independently employ more than 20 full-time employees in the United States. The criteria do not allow for the aggregation of employee counts across multiple entities.
A company that has always been exempt from Beneficial Ownership Information (BOI) reporting need not notify FinCEN. However, if a company initially filed a BOI report and subsequently qualifies for an exemption, it should file an updated BOI report to signify its newfound exempt status. This electronic filing entails the company identifying itself and marking a checkbox indicating its exemption.
A “FinCEN identifier” is a distinct identifying number issued by FinCEN upon request. This is obtained by giving the individual’s information to FinCEN directly to get back a FinCEN identifier. This FinCEN ID can now be used on reports instead of personal information. Each entity or individual is entitled to just one FinCEN identifier.
When a beneficial owner or company applicant possesses a FinCEN identifier, reporting companies can provide this ID number instead of the individual’s regular personal details on a BOI report. The use of FinCEN identifiers by reporting companies is an evolving regulatory aspect, with additional guidance anticipated upon the conclusion of ongoing rule making.
Starting January 1, 2024, individuals can request a FinCEN identifier through an electronic web form. This involves furnishing details such as full legal name, date of birth, address, unique identifying number from an acceptable identification document, and an image of said document. Upon submission, the individual promptly receives a unique FinCEN identifier.
Reporting companies can request a FinCEN identifier by indicating so on the BOI report. After submission, the company instantly obtains a unique FinCEN identifier. If a reporting company desires a FinCEN identifier after its initial BOI report, it can submit an updated report specifically for this purpose, even if other information remains unchanged.
Acquiring a FinCEN identifier is not mandatory for individuals or reporting companies.
Both individuals and reporting companies with a FinCEN identifier must promptly update or correct their information.
For individuals, any alterations to the submitted information must be reported within 30 days of occurrence. In the event of inaccuracies, corrections are required within the same timeframe.
Reporting companies, similarly, should use an updated or corrected beneficial ownership information report to update their FinCEN ID information.
FinCEN is actively exploring options to enable individuals to deactivate an unused FinCEN identifier. This approach aims to relieve individuals from continuously updating their underlying personal information. Further guidance on this functionality will be provided as FinCEN finalizes this process.
If you have additional questions, please contact us.