BOI Report Filing for Large Businesses

BOI Report Filing for Large Businesses

The recently-passed Corporate Transparency Act (CTA) dictates that certain businesses must, starting January 1, 2024, file beneficial ownership information (BOI) reports. Institutions like FinCEN hope that these reports will reduce instances of money laundering and other illegal activities.

What does the passing of the CTA mean for large businesses, though? Do large businesses have to file BOI reports, or are there exceptions that exclude larger institutions from these new requirements? FileForms can break down how larger businesses should interact with the CTA while providing professional services that may simplify the filing process.

What is a BOI Report?

A BOI report serves as an anti-laundering measure for businesses operating within the United States. FinCEN will now request that all qualifying institutions, including those with overseas holdings, file BOI reports on an annual basis. These reports need to include the following information:

• A business’ legal name
• Nicknames or trade names that a business uses in operations
• The business’ legal address
• The jurisdiction in which a beneficial owner and company applicant formed the business
• The business’s taxpayer identification number

BOI reports also require beneficial owners and company applicants to include the following information in their documentation:

• Names of beneficial owners and company applicants
• Dates of birth
• Residential addresses
• Identifying numbers from passports, state IDs, driver’s licenses, or a foreign passport

All qualifying institutions will need to file this information beginning on January 1, 2024. Businesses established prior to 2024 have until January 1, 2025, to submit their paperwork. Businesses established after January 1, 2024, have 90 days from their initial founding to file their reports.

Why Do Businesses Need to File BOI Reports?

BOI reports and the CTA at large both exist in an effort to reduce financial misconduct in all industries. It was the increased prevalence of crimes, including laundering and economic misuse, specifically, that drove Congress to pass the CTA. 

The government now hopes that because qualifying businesses will have to file BOI reports, it will be easier to identify laundering operations or businesses that don’t actually exist. Filing a BOI report subsequently assures the government that your business is operating legally instead of serving as a shell for economic misconduct.

Do Large Businesses Need to File BOI Reports?

FinCEN states that the businesses not required to file BOI reports include the following:

1. Certain types of securities reporting issuers. i
2. A U.S. governmental authority. ii
3. Certain types of banks. iii
4. Federal or state credit unions as defined in section 101 of the Federal Credit Union Act.
5. bank holding company as defined in section 2 of the Bank Holding Company Act of 1956, or any savings and loan holding company as defined in section 10(a) of the Home Owners’ Loan Act.
6. Certain types of money transmitting or money services businesses. iv
7. Any broker or dealer, as defined in section 3 of the Securities Exchange Act of 1934, that is registered under section 15 of that Act (15 U.S.C. 78o).
8. Securities exchanges or clearing agencies as defined in section 3 of the Securities Exchange Act of 1934, and that is registered under sections 6 or 17A of that Act.
9. Certain other types of entities registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934. v
10. Certain types of investment companies as defined in section 3 of the Investment Company Act of 1940, or investment advisers as defined in section 202 of the Investment Advisers Act of 1940.
11. Certain types of venture capital fund advisers. vi
12. Insurance companies defined in section 2 of the Investment Company Act of 1940.
13. State-licensed insurance producers with an operating presence vii at a physical office within the United States, and authorized by a State, and subject to supervision by a State’s insurance commissioner or a similar official or agency.
14. Commodity Exchange Act registered entities. viii
15. Any public accounting firm registered in accordance with section 102 of the Sarbanes-Oxley Act of 2002.
16. Certain types of regulated public utilities. ix
17. Any financial market utility designated by the Financial Stability Oversight Council under section 804 of the Payment, Clearing, and Settlement Supervision Act of 2010.
18. Certain pooled investment vehicles. x
19. Certain types of tax-exempt entities. xi
20. Entities assisting a tax-exempt entity described in (xix) above.
21. Large operating companies with at least 20 full-time employees, xii more than $5,000,000 in gross receipts or sales, and an operating presence at a physical office within the United States. xiii
22. The subsidiaries of certain exempt entities. xiv
23. Certain types of inactive entities that were in existence on or before January 1, 2020, the date the Corporate Transparency Act was enacted. Xv

Large businesses that don’t fall within these 23 exceptions must file BOI reports.

How Do Qualifying Large Businesses File BOI Reports?

If a large business finds that it is not exempt from having to file a BOI report, said business should either elect a representative to take on the task of filing its paperwork or reach out to FileForms to request representation throughout the BOI filing process.

Note that because both the CTA and BOI filing processes are relatively new, the institutions collecting businesses’ data expect some businesses to make filing mistakes. There is no penalization, at this point, for mistakes on a BOI report. Instead, parties who recognize that they’ve made an error on their BOI report should refile within 30 days of discovering the error.

There is a penalty for not filing a BOI report at all. Businesses that fail to file must pay $500 per day for every day past their filing deadline that they fail to submit a BOI report.

Let’s Break Down FinCEN’s Expectations of Large Businesses Together

The implementation of CTA and its related BOI reports will put more informational demands on businesses big and small starting in 2024. Businesses that want to delegate responsibility to someone with a comprehensive and ever-growing understanding of CTA regulations can work with FileForms to create a FinCEN-compliant report.

FileForms can walk you through the process of filing a large business’s BOI claim or who can undertake the process on a large business’s behalf. For more information about the CTA, BOI reports, and other financial transparency efforts, interested parties can contact FileForms today.