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Empowering Registered Agents by Enabling Streamlined BOI Report Filing

By FileForms | November 27, 2023
Empowering Registered Agents by Enabling Streamlined BOI Report Filing

Beneficial Ownership Information (BOI) reporting is critical to corporate governance, particularly for registered agents and company formation service providers representing various entities, such as corporations, LLCs, and partnerships. In order to comply with the new federal filing requirement, clients will look to their registered agents and compliance services providers to file their Beneficial Ownership Information (BOI) reports as required by the Corporate Transparency Act (CTA).

The CTA, a law that is part of the Anti-Money Laundering Act of 2020, seeks to prevent money laundering and terrorist financing with new reporting requirements on domestic and foreign entities doing business in the United States. The critical component of beneficial ownership, as it relates to the CTA, is the required submission of specific information about an entity’s beneficial owners to the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).

This article explains the rationale behind beneficial ownership reporting, the systematic steps registered agents can take to ensure proper compliance for the entities they represent, and how FileForms assists in the process.

Understanding Beneficial Ownership

Beneficial ownership is when an individual or group of individuals possesses control, or exerts influence, over an asset or reporting company even though the legal title or registration of that asset or company is under another name. A lack of transparency regarding the identity of a beneficial owner can easily lend itself to illicit activities such as money laundering and terrorist financing. The U.S. Congress, through the CTA, mandates that entities provide specific beneficial ownership information in the form of a BOI report to FinCEN by January 1, 2024. This requirement is designed to remove anonymity around entity ownership and mitigate financial misconduct.

Defining “Entity” and “Registered Agent”

Entities encompass a variety of organizational structures like corporations, limited liability companies (LLCs), or partnerships, officially registered with the state’s Secretary of State. They are recognized as legal persons who can engage in business ventures and bear legal obligations. Newly formed and existing entities must adhere to various state and federal regulations – including the newly unveiled BOI Report.

Registered agents are individuals or firms designated by active companies to receive service of process notices, government correspondence, and compliance-related documents on the company’s behalf, acting as the communication link between the government and the company.

Defining a “Reporting Company”

There are two categories of reporting companies – domestic and foreign reporting companies. Companies formed under U.S. laws are generally domestic reporting companies such as corporations or limited liability companies. This also includes any other entities created by filing a document with a Secretary of State (SOS) or similar office. A foreign reporting company is a company formed in a jurisdiction outside of the U.S. that has registered with a SOS or similar office to conduct business in the U.S.

Reporting companies are required to file BOI reports with FinCEN. The information required to be furnished to FinCEN on BOI Reports is covered in additional detail below.

Path to Compliance for Entities and Registered Agents

Understanding the requirements around BOI reporting is a cornerstone of compliance in 2024, and this is where FileForms can help. Through their registered agents, entities should understand who qualifies as a beneficial owner and the specific information required for reporting.

Engaging professional legal and financial advisors can demystify the complex terrain of beneficial ownership reporting; however, such resources will not have the capacity to efficiently serve the 32.6 million entities expected to file in 2024. Not to mention, the costs associated with such engagement are likely high.

Working with trusted partners, such as FileForms, can help registered agents and entities better understand the requirements of the BOI report and leverage solutions to facilitate secure compliance and information disclosure.

Information Collection

Exhaustive collection and verification of beneficial ownership information on government portals can be time-consuming and lack a modern user experience. Entities typically rely on their registered agents to collect critical information for government filings and ensure the accuracy and completeness of the information collected.

Information required for BOI report filing includes:

  • Entity’s legal name
  • Trade names, such as “doing business as” (d/b/a) or “trading as” (t/a) names
  • Current U.S. street address:
    • Principal place of business for domestic companies
    • U.S. business address for foreign companies
  • Jurisdiction of formation or registration
  • Taxpayer Identification Number

Information required for individual beneficial owners and company applicants includes:

  • Full legal name
  • Date of birth
  • Current address
  • Unique identifying number and its issuing jurisdiction (e.g., U.S. passport or driver’s license)
  • Image of the document showing the identifying number

This information can be challenging to collect, store, and monitor given the private nature of these details and the regulatory requirement to refile a BOI report when there is a change of information, such as:

  • An expiring government ID
  • Change in executive leadership or investor group
  • Moving to a new address

Information changes must be reported to FinCEN within 30 days, a tight window that FinCEN is considering expanding to 90 days.

FileForms facilitates collecting and securely storing company and owner information with an easy-to-use platform that files directly with FinCEN. The FileForms platform sends notifications via email or text message to each individual beneficial owner to privately upload their government ID using their mobile device or personal computer. For registered agent clients who have many entities, FileForms can file in bulk with a simple CSV, Excel, or API data upload, saving hours of manual data inputs into a government portal. Schedule a live demo to see our product live.

Company Applicants

A reporting company created on or after January 1, 2024, is required to report information about its company applicants. Company applicants are individuals who assist in the formation of a company, typically by filing formation documents with a SOS or other similar office. Each reporting company that is required to identify company applicants must identify and report to FinCEN at least one company applicant, at most two. All company applicants must be individuals rather than entities.

There are two categories of company applicants:

  • Direct Filer – The individual who directly filed the document that created a domestic reporting company or directly filed the document that first registered a foreign reporting company. Such an individual would have filed the document (physically or electronically) with the SOS or a similar office.
    • Must be identified by all reporting companies that have a company applicant reporting requirement.
  • Directs or controls the filing action – The individual who was primarily responsible for directing or controlling the filing of the creation of the first registration document. This individual is a company applicant even though the individual did not actually file the document with the SOS or a similar office.
    • Must only be reported when more than one individual is involved in the filing.

What is a FINCEN identifier, and how can I use it?

A “FinCEN” Identifier is a unique identifying number that FinCEN will issue to an individual or reporting company upon request after the individual or reporting company provides certain information to FinCEN.

  • An individual or reporting company is not required to obtain a FinCEN identifier.
  • An individual or reporting company may only receive one FinCEN identifier.
  • Your company may include FinCEN identifiers in its BOI report instead of certain required information about beneficial owners or company applicants.

FinCEN Identifiers for Individuals

Individuals may electronically apply for FinCEN identifiers and must provide the following information to FinCEN on their application:

  • Name
  • Date of birth
  • Address
  • Unique Identifying number from an acceptable ID document
    • Passport or driver’s license
  • An image of the identification document.

After an individual submits an application, they will immediately receive a unique FinCEN identifier. Once a beneficial owner or company applicant has a FinCEN identifier, reporting companies may report it in place of the otherwise four pieces of personal information about the individual in BOI Reports.

FinCEN Identifiers for Reporting Companies

A reporting company may request a FinCEN identifier when it submits a BOI Report by checking a box on the BOI Report. The reporting company may provide its FinCEN identifier in lieu of its unique taxpayer identification number, such as an employer identification number (EIN) or taxpayer identification number (TIN).

Technological Leverage

Employing technology can streamline the reporting process. FileForms offers a centralized system for managing and submitting the necessary filings accurately and on time. This information is then securely stored with FileForms for future BOI filings, ensuring registered agents have a streamlined filing process to serve the many entities they represent and will form in 2024.

Regular Review and Updates

The fluid regulatory landscape requires regular reviews and updates of beneficial ownership information, ensuring an up-to-date record to maintain compliance. FileForms helps clients monitor and manage their reporting changes, enabling registered agents to ensure that the entities they represent remain compliant and do not waste time or pay unnecessary fees up to $10,000 per entity.

Stakeholder Education

It is invaluable to educate stakeholders, whether they be employees, clients, partners, or other company owners, on the broad impact of the new BOI reporting requirement and how responsibilities and processes will change in order to ensure compliance. FileForms provides an extensive information library and reservoir of helpful resources readily available for registered agent partners to educate their clients and ultimately use FileForms to file their BOI reports in 2024.

Harnessing FileForms for Streamlined Compliance

FileForms is a trusted partner to registered agents nationwide, helping them to turn headaches into profits with its industry-leading partnership model and revolutionizing BOI filing technology. With no upfront cost, registered agents can offer BOI filing services to their clients through our referral partnership program.  FileForms provides a one-stop solution, offering a blend of proprietary technology, educational content, and expert services tailored to meet reporting companies’ filing and reporting needs. Become a partner today!

Effortless Filing

FileForms simplifies the filing process, providing an intuitive platform for submitting BOI reports, ensuring on-time filing and accurate compliance. Do not waste countless hours relying on self-education on a government website to determine if your clients need to file. Utilize the FileForms Free BOI Qualification Quiz, where our Wizard determines if your client is a reporting company. Save your clients hours of reading in a matter of minutes through a partnership with FileForms and benefit from a modern filing platform.

Expert Guidance

The FileForms platform is filled with expert guidance, providing entities and registered agents with the knowledge and insights to navigate the reporting process proficiently. Our team is on standby to offer white-glove customer service and answer questions on the new regulations.

Secure and Reliable

With a focus on security and reliability, FileForms safeguards sensitive information, fostering trust and confidence in the compliance process. FileForms brings an industry-leading standard to the BOI filing industry that aligns with the standards required to work with national financial institutions. FileForms maintains a trust report where its security policies and privacy measures are publicly available.

The mandate to file Beneficial Ownership Information reports is a significant step toward fostering a transparent and accountable business ecosystem. With the aid of registered agents and streamlined solutions like FileForms, entities are equipped with all the resources they need to meet the federal government’s BOI reporting requirements. By adopting a structured, collaborative approach towards compliance, underscored by transparency, professional guidance, and technological leverage, entities, and registered agents can navigate the reporting process efficiently and accurately.

Get started with FileForms today to ensure the entities you represent as a registered agent remain proactive, transparent, and compliant.