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B.O.I. Report Information:

What is a Beneficial Ownership Information (BOI) report?

  • The BOI report is a new reporting requirement issued by a branch of the U.S. Department of Treasury, known as the Financial Crime Enforcement Network (FinCEN), which requires many Domestic and Foreign (non-U.S.) companies to provide information about the reporting company, its beneficial owner(s), and for companies formed after January 1st, 2024, its company applicant(s).

What is a Reporting Company?

  • A reporting company is a Domestic or Foreign (non-U.S.) entity that is registered to do business in any U.S. State or Tribal Jurisdiction by filing a creation document with a secretary of state or similar office, unless subject to exemption. There are currently twenty-three (23) exemptions which may be viewed in FinCEN’s “Small Entity Compliance Guide” or in Section C. 2 on FinCEN’s Frequently Asked Questions (FAQs) page.
  • Further information and examples regarding Reporting Companies may be found in FinCEN’s Small Entity Compliance Guide and in Section C on FinCEN’s FAQs page.

Who/What is a Beneficial Owner?

  • A Beneficial Owner is an individual who either directly or indirectly: (1) exercises substantial control over a reporting company, or (2) owns or controls at least 25 percent of a reporting company’s ownership interest.
    • Category 1: Substantial Control
      • An individual is considered to be exercising substantial control of a reporting company if they fall into any of the following categories:
      • The individual is a senior officer (i.e. President, CFO, CEO, COO, etc.)
      • The individual has authority to appoint or remove certain officers or a majority of directors of the reporting company.
      • The individual is an important decision-maker for the reporting company.
      • Other rights and responsibilities may also constitute substantial control.
    • Category 2: Ownership Interest
      • Any Individual who owns or controls at least 25 percent of a reporting company’s ownership interests.
      • Any of the following, but not limited to, may be considered as ownership interest:
        • Equity
        • Stock
        • Voting Rights
        • As well as more complex instruments
  • There are currently five exceptions for who may be excluded from being listed as a Beneficial Owner:
    • The individual is a Minor Child (their parent or legal guardian’s information may be provided instead).
    • The individual merely acts on behalf of an actual beneficial owner as their nominee, intermediary, custodian, or agent.
    • The individual:
      • Is an employee of the reporting company.
      • Their substantial control over, or economic benefits from, the reporting company derive solely from the employment status as an employee.
      • and the individual is not a senior officer of the reporting company
    • The individual’s only interest in the reporting company is a future interest through a right of inheritance
    • The individual is a creditor of the reporting company
  • Further information and examples regarding Beneficial Owners may be found in FinCEN’s Small Entity Compliance Guide and in Section D on FinCEN’s FAQs page.

Who/What is a Company Applicant?

  • There are two categories of individuals who may be considered a company applicant for a reporting company:
    • Category 1: Direct Filer
      • This is an individual who directly filed the creation document that registers the reporting company with a secretary of state or similar office.
    • Category 2: Directs or controls the filing action
      • This is an individual who was primarily responsible for directing or controlling the filing of the creation document.
  • For all reporting companies that were registered on or after January 1st, 2024, they will need to provide up to, but no more than two (2) company applicants on their BOI report.
  • For all reporting companies that were registered prior to January 1st, 2024, they will not be required to provide company applicant information on their BOI report.

Further information and examples regarding Company Applicants may be found in FinCEN’s Small Entity Compliance Guide and in Section E on FinCEN’s FAQs page.

What is a FinCEN Identifier Number?

  • A FinCEN Identifier is a unique identifying number that individuals or reporting companies may request from FinCEN by providing the necessary reporting information to FinCEN.
    • For individuals, they may request a FinCEN Identifier by submitting a FinCEN Identifier Application providing their name, date of birth, residential address, and identifying document information (with image). Once submitted, the individual will immediately receive their FinCEN Identifier which may be provided on BOI reports in lieu of providing their Personal Identifiable Information (PII).
    • For reporting companies, they may request a FinCEN Identifier when they file their BOI report by checking the corresponding box on the reporting form.
  • Updating your FinCEN Identifier Information:
    • When the information an individual or reporting company reported to FinCEN to obtain a FinCEN Identifier changes, they must update the reported information within 30 Calendar Days after the change has occurred.
  • Further information and examples regarding FinCEN Identifiers may be found in FinCEN’s Small Entity Compliance Guide and in Section M on FinCEN’s FAQs page.

How often do Reporting Companies need to file a BOI report?

  • Upon forming or registering a reporting company with a Secretary of State or similar office after January 1st, 2024, the company will have 90 Calendar Days to file their BOI report online using FinCEN’s filing system after receiving actual or public notice that its creation or registration is effective (which ever occurs first). For reporting companies registered prior to January 1st, 2024, they will need to file their BOI report with FinCEN by January 1st, 2025.
  • If any of the previously reported information to FinCEN has changed or needs corrected, the entity will need to file an updated/amended report within 30 Calendar Days after the change has occurred or the inaccuracy has been known.
  • Further information and examples regarding Reporting Periods may be found in FinCEN’s Small Entity Compliance Guide and in Sections G through J on FinCEN’s FAQs page.

What are the penalties for failure to file a BOI report?

  • The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in a civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.
  • Additionally, a person may be subject to civil and/or criminal penalties for willfully causing a company not to file a required BOI report or to report incomplete or false beneficial ownership information to FinCEN.
  • Further information and examples regarding Reporting Penalties may be found in FinCEN’s Small Entity Compliance Guide and in Section K on FinCEN’s FAQs page.

If you have any questions, please feel free to reach out to our BOI team at:

BOI@recordsearch.com

 

If you would like our assistance with submitting a BOI report to FinCEN, please upload a completed report to our secure upload portal which may be accessed by clicking on the link below:

Submit Completed BOI Report Form