When Should my company report beneficial ownership information?
On January 1, 2024, FinCEN launched the BOI E-Filing website to report beneficial ownership information (https:/ /boiefiling.fincen.gov, for its acronym in English).
A reporting company created or registered to do business before January 1, 2024 will have until January 1, 2025 to file its initial report from BOI.
A reporting company created or registered in 2024 will have 90 calendar days to file its application after receiving actual or public notification 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 its return after receiving actual notice or public that its creation or registration is effective.
When should I report my company's beneficial ownership information to FinCEN?
A reporting company created or registered to do business before January 1, 2024 will have until January 1, 2025 to file its initial report of information on beneficial owners.
A reporting company created or registered on or after January 1, 2024 and before January 1, 2025 will have 90 calendar days after receiving the notification of the creation or registration of the company to submit its initial BOI report. This 90 calendar day period begins to run from the time the company receives notification that its creation or registration is effective, or after a secretary of state or similar office first provides public notice of its creation or registration. registration, whichever comes first.
Declaring companies created or registered on or after January 1, 2025 will have 30 calendar days from the actual or public notification that the Company creation or registration is effective for filing your initial BOI reports with FinCEN.
When will FinCEN accept beneficial ownership information reports?
FinCEN will begin accepting beneficial ownership information reports on January 1, 2024. Beneficial ownership information reports will not be accepted before that date.
Who can file a BOI report on behalf of a reporting company and what information will be collected about filers?
Any person the reporting company authorizes to act on its behalf, such as an employee, owner, or third-party service provider, may submit a BOI report on behalf of the reporting company. When filing the BOI report, individual taxpayers should be prepared to provide basic contact information about themselves, including their name and email or phone address.
Reporting company
Which companies will be required to report beneficial ownership information to FinCEN?
Companies required to report are called reporting companies.
There are two types of reporting companies:
National companies that declare are corporations, limited liability companies, and any other entity created by filing a document with a secretary of state or any similar office in the United States.
Foreign companies that declare 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 filing a document before a secretary of state or any similar office
Who is exempt from the reporting requirement?
There are 23 types of entities that are exempt from the requirements to submit beneficial ownership information. These entities include publicly traded companies that meet specific requirements, many nonprofit organizations, and certain large operating companies.
The following table summarizes the 23 exemptions:
Exemption No. | Abbreviated title of exemption |
|---|---|
1 | Securities information issuer |
2 | Government authority |
3 | Bench |
4 | Credit union |
5 | Holding company of the depository institution |
6 | Money services business |
7 | Broker or securities agent |
8 | Stock exchange or clearing agency |
9 | Other entity registered in the Securities Market Law |
10 | Investment company or investment advisor |
11 | Venture capital fund advisor |
12 | Insurance company |
13 | State-licensed insurance producer |
14 | Entity registered in the Commodity Exchange Law |
15 | Accounting firm |
16 | Public utility |
17 | Utility in the financial market |
18 | Joint investment vehicle |
19 | Tax-exempt entity |
20 | Entity that assists a tax-exempt entity |
21 | Large operating company |
22 | Subsidiary of certain exempt entities |
23 | Inactive entity |
Corporate exemptions include:
Large operating companies that meet certain employment and/or tax reporting criteria; specifically, any entity that (1) employs more than 20 full-time employees in the U.S., (2) in the preceding year has filed U.S. federal income tax returns showing more than $5,000,000 in gross receipts or sales in the aggregate (on a consolidated basis, if applicable), excluding gross receipts or sales from sources outside the U.S., and (3) has an operating presence in a physical office within the USA
Publicly traded companies that are issuers of securities and are registered under Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act") or
otherwise they are required to present complementary and periodic information under article 15(d) of the Securities Market Law
Is a sole proprietorship a reporting company?
No, unless a sole proprietorship has been created in the United States by filing a document with a secretary of state or similar office.
An entity is a reporting corporation only if it was created (or, if a foreign corporation, registered to do business) in the United States through the presentation of said document.
Submit a document to a government agency to obtain
Beneficial owner
Who is the beneficial owner of a reporting company?
A beneficial owner is a person who, directly or indirectly:
(1) exercises substantial control over the reporting company, or
(2) owns or controls at least 25% of the shareholdings of the reporting company.
What is substantial control?
An individual can exercise substantial control over a reporting company in four different ways. If the person falls into any of the following categories, the person is exercising substantial control:
The person is a senior official (the president of the company, the financial director, the general counsel, the office of the chief executive officer, the chief operating officer or any other official performing a similar function).
The person has authority to appoint or remove certain officers or a majority of directors (or similar body) of the reporting company.
The individual is an important decision maker for the reporting company. p>
The individual has any other form of substantial control over the reporting company.
One of the indicators of substantial control is that the individual is an important decision maker.
What are the important decisions?
Important decisions include decisions about the business, finances, and structure of a reporting company. A person who directs, determines or has substantial influence over these important decisions exercises substantial control over a reporting company.
Important decision maker
Business
Such as:
Nature, scope and attributes of the business
The selection or termination of business lines or companies, or the geographic focus
the conclusion or termination, or the fulfillment or non-compliance of significant contacts
Finances
Such as:
Sale, lease, mortgage or other transfer of any major asset
significant expenses or investments, capital issues, incurring significant debt or approving the operating budget
Remuneration plans and incentive programs for senior officials
Structure
Such as:
Reorganization, dissolution or merger
Amendments to any material corporate governance document of the reporting company, including articles of incorporation or similar formation documents, bylaws and policies or procedures significant
What is an ownership interest?
An ownership interest is generally an agreement that establishes ownership rights in the company that informs. Examples of ownership interests include equity shares, shares, voting rights, or any other mechanism used to establish ownership.
What is capital, shares or voting rights ?
Any interest classified as shares or similar, regardless of whether it confers voting power or voting rights, and even if the interest is transferable, examples include:
Capital, shares or similar instrument
Certificate or prior subscription to the organization
Certificate of Deposit or Certificate of Deposit of Transferable Shares or Certificate of Deposit for a Security Interest in a Joint Venture or Certificate of Participation in a Commercial Trust.
What is capital or profit interest?
Any interest in the assets or earnings of a business organized as an LLC, which is similar to stock in a corporation and is sometimes called a unit.
What are comfortable instruments?
Any instrument convertible into capital, shares or voting rights or participation in the capital or profits, whether or not it is necessary to pay something to exercise the conversion.< /p>
Related items are also ownership interests:
1. Any future in any convertible instrument
2. any security or right to buy, sell or subscribe for a share or interest in shares, shares or voting rights or participation in capital or profits, even if such security is a debt.
What is option or privilege?
Any put, call, straddle or other option or privilege to buy or sell shares, shares or voting rights, capital or participation in profits, or convertible instruments , EXCEPT if the option or privilege is created and maintained by others without the knowledge or participation of the reporting company.
What is Catch-ALL?
Any other instrument, contract, arrangement, understanding, relationship or mechanism used to establish ownership.
Company Applicant
Who is the company requesting a reporting company?
Only reporting companies created or registered on or after January 1, 2024 will be required to inform their company applicants.
A company that must inform its business applicants will have up to two people who could qualify as business applicants:
1. The person who directly presents the document that creates or registers the company; and
2. If there is more than one person involved in the presentation, the person who is primarily responsible for directing or controlling the presentation.
In short, if you open the business after January 1, 2024, you must present yourself as a company applicant.
You must:
1. Identify the person who directly submitted the document of creation or first registration of the reporting company to the Secretary of State or similar office.
2. If more than one person was involved in the presentation of the creation of the reporting companies, you must identify the person primarily responsible for directing or controlling the presentation of the creation document or first registration .
It is important to remember that a company applicant cannot be removed from a BOI report, even if the company applicant no longer has a relationship with the reporting company.
A reporting company created on or after January 1, 2024 is required to report company applicant information in its initial BOI report , but is not required to submit an updated BOI report if information about the applicant company changes.
What information will a reporting company have to report about itself?
A reporting company will have to report:
1. Your legal name.
2. Any trade name, "doing business as" (d/b/a) or "trade as" (t/a).
3. The current address of your principal place of business or headquarters or, for reporting companies whose principal place of business is outside the United States, the address current location from which the company conducts business in the United States;
4. Your jurisdiction of incorporation or registration; (i.e. your status)
5. Your Taxpayer Identification Number, EIN (or, if a foreign reporting company has not received a TIN, a tax identification number issued by a foreign jurisdiction and the name of the jurisdiction ).
A reporting company will also need to indicate whether it is submitting an initial report, or a correction or update to a previous report.< /p>
What information will a reporting company have to report about its beneficial owners?
For all beneficial owners, a reporting company will need to provide:
1. The name of the person;
2. Date of Birth.
3. Residential address; and
4. An identification number of an acceptable identification document, such as a U.S. passport or driver's license, and the name of the issuing state or jurisdiction of the identification document.
The reporting company must also communicate an image of the identification document used.
Information required from company applicants?
For each person who is an applicant for a company, a reporting company will have to provide:
1. The name of the person;
2. Date of Birth.
3. Address; and
4. An identification number of an acceptable identification document, such as a U.S.
passport or driver's license, and the name of the issuing state or jurisdiction of the
identification document.
The reporting company must also communicate an image of the identification document used.
If the company applicant works on company formation, for example , as a lawyer or company formation agent, then the reporting company must report the business address of the applicant company. Otherwise, the reporting company must report the residential address of the requesting company.
What are some acceptable forms of identification that will satisfy the reporting requirement?
The only acceptable forms of identification are:
1. An unexpired U.S. driver's license (including driver's licenses issued by a commonwealth, territory, or possession of the United States);
2. An unexpired identification document issued by a US state or local government, or an Indian tribe
3. An unexpired passport issued by the US government; o
4. An unexpired passport issued by a foreign government (only when a person does not have one of the other three forms of identification listed above).
Is there a requirement to report information on beneficial owners annually?
is no annual reporting requirement. Reporting companies must submit an initial BOI report and update or correct BOI reports as necessary.
Can a reporting company report a PO Box as its current address?
No. The reporting company address must be a US mailing address and cannot be a PO Box.
When do I have to file an initial beneficial ownership information report with FinCEN?
If your company existed before January 1, 2024, you must submit your initial beneficial ownership information report by January 1, 2025 .
If your company was created or registered on or after January 1, 2024 and before January 1, 2025, you must submit your initial report of beneficial ownership information within 90 calendar days of receipt of actual or public notice that its creation or registration is effective. Specifically, this 90 calendar day period runs from the time the company receives actual notification that its formation or registration is effective, or after a secretary of state or similar office first provides public notice of its formation. or registration, whichever comes first.
If your company was created or registered on or after January 1, 2025, you must submit your initial beneficial ownership information report within the 30 calendar days after receipt of actual or public notice that its creation or registration is effective.
How can I quickly obtain a Taxpayer Identification Number (TIN) for a new business so I can file an initial information report? about beneficial owners in time?
The Internal Revenue Service (IRS) offers a free online application for an Employer Identification Number (EIN) , for its acronym in English), a type of TIN, which is provided immediately after submission of the application. For more information about TINs, see "Taxpayer Identification Numbers (TINs)" in IRS.gov< /a> (https://www.irs.gov/individuals/international-taxpayers/taxpayer-identification-numbers -tin). For more information about employer identification numbers and to access the EIN application online, see "Apply for an Employer Identification Number (EIN) Online" in IRS.gov< /a> (https://www.irs.gov /businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online).
A paper filing is required if a foreign person who does not have an Individual Taxpayer Identification Number (ITIN) applies for an EIN. According to the IRS, receiving an EIN through this process could take six to eight weeks. If you are a foreign individual who may need to obtain an EIN for a reporting business, we recommend that you apply for an ITIN in advance. Foreign filing companies that are not subject to U.S. corporate income tax may report a foreign tax identification number and the name of the relevant jurisdiction instead of an EIN or TIN.
Should an initial Board of Investment report include the historical beneficial owners of a reporting company, or only the beneficiaries real at the time of presentation?
An initial Board of Investment report should only include beneficial owners at the time of filing. Reporting companies must notify FinCEN of changes in beneficial ownership and related BOIs through updated reports.
How does a company created or registered after January 1, 2024 determine its creation or registration date?
The date of creation or registration of a reporting company is the date on which:
(1) the reporting company receives actual notification that its creation (or registration) has become effective; or
(2) a secretary of state or similar office first provides public notice, for example, through a publicly accessible record, of that the national information company has been created or the foreign information company has been registered.
FinCEN recognizes that there are different state reporting practices. In certain states, automated systems provide notice of formation or registration to newly formed or registered businesses.
In other states, no actual notice of formation or registration is provided, and newly formed companies receive notice through public publication of state records.
FinCEN believes that persons creating or registering reporting companies will likely be kept informed of notices or publications of creation or registration, given the interest of those persons to establish an operating business or participate in the activity for which the reporting company was created.
Updated report
What should I do if the information reported above changes?
If there is any change to the required information about your company or its beneficial owners in a beneficial ownership information report that your company filed, your company must submit an updated report no later than 30 days after the date of the change.
A reporting company is not required to submit an updated report for any change in previously reported information about an applicant for the company.
What are some of the likely triggers for the need to update a beneficial ownership information report?
The following are some examples of changes that would require an updated beneficial ownership information report:
Any change in the information reported for the reporting company, such as the registration of a new trade name.
A change in beneficial ownership, such as a new CEO, or a sale that changes who meets the ownership stake threshold 25 percent (see question D.4 for more information on ownership interests).
Any change in the name, address or unique identification number of a beneficial owner previously provided to FinCEN. If a beneficial owner obtained a new driver's license or other identification document that includes a change in name, address, or identification number, the reporting company would also be required to file an updated beneficial ownership information report with FinCEN, including an image of the new identification document.
Corrected report
What should I do if I learn of an inaccuracy in a report?
If a beneficial ownership information report is inaccurate, your company must correct it no later than 30 days after the date your company realized the inaccuracy or had reason to know about it. This includes any inaccuracies in the required information provided about your business, your beneficial owners or your business applicants.
What should a reporting company do if it is exempt after filing a complaint?< /p>
If a reporting company filed a beneficial ownership information report, but is later exempt from filing the report, the company must file an updated report indicating that it is no longer a reporting company. An updated Board of Investment report for a newly exempt entity will only require that: (1) the entity identify itself; and (2) check a box indicating your new exempt status.
Compliance/Enforcement
What happens if a reporting company fails to report beneficial ownership information to FinCEN or fails to update or correct information within the required period?
FinCEN is working hard to ensure that reporting companies are aware of their obligations to report, update and correct beneficiary information real.
FinCEN understands that this is a new requirement. If you correct an error or omission within 90 days of the original report due date, you can avoid being penalized. However, you could face civil and criminal penalties if you fail to comply with your beneficial ownership information obligations.
What penalties do individuals face for violating the Board of Investment's reporting requirements?
As specified in the Corporate Transparency Law, a person who knowingly violates the reporting requirements of the Reporting company may be subject to to civil penalties of up to $500 for each day if they let the violation continue. That person may also be subject to criminal penalties of up to two years in prison and a fine of up to $10,000.
Potential violations include deliberately failing to file a beneficial ownership information report, deliberately submitting false beneficial ownership information, or failing to correct or deliberately update previously reported beneficial ownership information.
What are the criteria for exemption from the obligation to submit information on beneficial ownership to inactive entities?
An entity qualifies for the dormant entity exemption if all six apply following criteria:
(1) The entity existed on or before January 1, 2020. |
(2) The entity is not engaged in active business. |
(3) The entity is not owned by a foreign person, either directly or indirectly, in whole or in part. "Foreign person" means a person who is not a person of the United States. A United States person is defined in section 7701(a)(30) of the Internal Revenue Code of 1986 as a citizen or resident of the United States, domestic partnership and corporation, and other estates and trusts. |
(4) The entity has not experienced any change in ownership in the preceding twelve-month period. |
(5) The entity has not sent or received funds in an amount greater than $1,000, either directly or through any financial account in the that the entity or any affiliate of the entity had an interest, in the preceding twelve month period. |
(6) The entity does not own any type or type of assets, whether in the United States or abroad, including any interest in the property of any corporation, limited liability company or other similar entity. |
How does a company inform FinCEN that the company is exempt?
A company does not need to inform FinCEN that it is exempt from the Board of Investment's reporting requirements if it has always been exempt.< /span>
If a company filed a BOI report and later qualifies for an exemption, that company must submit an updated BOI report to indicate that it is newly exempt of reporting requirements. Updated Board of Investment reports are filed electronically through the secure filing system. An updated Board of Investment report for a newly exempt entity will only require the entity to: (1) identify itself; and (2) check a box indicating your new exempt status.
Key takeaways and frequently asked questions
1. When do I have to report?
If you established your business with your Secretary of State after January 1, 2024, you have 90 days to report your beneficiary status Real.
2. Did I already have my company before January 1, 2024 when it is my turn to report?
If you established your business with your Secretary of State before January 1, 2024, you have until January 1, 2025 to inform your beneficial ownership status.
3. If you establish your entity after January 1, 2025, You have 30 days to report your beneficial ownership status.
4. Which Entities that are obliged to report on the status of the
beneficial owners
Corporations
limited liability companies, LLC
any foreign entity that is located in a foreign country, but is registered to do business in the United States.
5. Are there exemptions? Yes, they include, among others,
non-profit organizations
organizations that have 20 full-time employees or that reported at least $5 million in gross revenue or sales in the previous year.
government entities, to name a few, in total there are 23 different exemptions.
6. Do I declare a company? Is it my personal responsibility to make the report?
No, a sole proprietorship is not considered a reporting company, even if it has an EIN, a business tax receipt or fictitious name registration.
7. What is a Beneficial Owner?< /strong>
A beneficial owner is any person who directly or indirectly controls a company
Or, own at least 25% of a company.
8. Do I get paid to open companies, what responsibility do I have?
If you open a business for another person or another company, you will have to report yourself as an applicant for the company in the BOI report of the company.
If you opened a business for an individual or another company, before January 1, 2024, you do not have to apply as an applicant for the company.
9. What information do I have to provide as a company applicant?
Applicants for The company must inform its
full name
date of birth
physical address
unexpired US driver's license and/or valid passport.
If you work for a company that opens and establishes entities, when you report as an applicant for the company you will not use your residential address, you will use your business address.
10. What information do I have to give about my company?
A company will have to report its:
legal name of the legal Beneficiary
company name
registered and related fictitious names
the current address of your principal place of business or company headquarters
your registration status and
tax identification number or your EIN.
11. As a beneficiary, what information do I have to provide?
The beneficial owner must inform his:
full name
date of birth
residential address
Copy of your unexpired driver's license and/or valid passport.
12. Does my ID have to have a photo?
All requests and BOI applicants must include photo identification.
13. What forms of identification can I use?
Acceptable forms of photo identification include
unexpired US driver's license,
Unexpired identification document Issued by a US state or local government or an Indian tribe.
An unexpired passport issued by the U.S. government or a foreign government.
14. I am no longer the owner of the company, do I have to report?
Beneficial owners who are no longer owners as of January 1, 2024 do not need to be reported in the BOI report.
15. From what date do you start counting the 90 days to report?
Businesses established after January 1, 2024 Your 90-day reporting requirement begins the day you receive notification that your business registration has been accepted.
16. What do I do if there are changes in the company?
Any change in a reporting company must be reported within 30 days of the change.
17. Did I find an error in my report?
All errors must be reported and corrected within 30 days of becoming aware of said error.
18. What happens if I don't make the report?
Intentional neglect of your BOI report can cost you up to $500 per day or a $10,000 fine and up to two years in prison.
19. I have been years since my company closed, do I have to file the report?
There are exemptions for inactive companies. You must meet all six criteria to qualify for the exemption. If you do not meet the six criteria you have to report.
1. The entity existed on or before January 1, 2020.
2. The entity is not engaged in active activities.
3. The entity is not owned by a foreign person.
4. The entity has not experienced any change in ownership in the
previous 12 month period.
5. The entity has not sent or received funds in an amount greater than $1000.
6. The entity does not own any type or type of assets, either in the States
United or abroad.
Comments