Upcoming Webinar: April 24th, 2024 – The Corporate Transparency Act: Navigating BOI Reporting

Background Background

How do I File a BOI Report?

Filing a Beneficial Ownership Report (BOI Report) is an important regulatory requirement, but the process can be confusing if you’re unfamiliar with the reporting obligations and definitions. 

This guide was created to help business owners understand if their entity qualifies as a reporting company that is subject to BOI report submission standards. 

We’ll explain key terms from the Corporate Transparency Act and explore various types of businesses that may qualify for exemptions. For those who need to report, we’ll outline how to identify beneficial owners and properly file the required information. 

How do I Know If I Need to File a Beneficial Ownership Report for My Business Entity?

The first step is to determine if your company is required to report beneficial ownership information (BOI) to FinCEN. Reporting companies generally include domestic entities like corporations, partnerships, and LLCs formed in any U.S. state, as well as foreign companies registered to do business in the U.S. However, certain types of regulated or large operating companies are exempt. 

According to the Corporate Transparency Act, reporting companies are defined as:

Domestic Reporting Companies

Any corporation, limited liability company, or other similar entity that is created by the filing of a document with a secretary of state or similar office under the law of a state or Indian tribe. 

Foreign Reporting Companies

Any corporation, limited liability company, or other similar entity that is created by the filing of a document with the secretary of state or a similar office under the law of a foreign country and registered to do business in the United States by the filing of a document with a secretary of state or similar office under the law of a state or Indian tribe.

Unless they qualify for an exemption, any corporation, LLC, or partnership legally formed in the U.S. or registered to operate here as a foreign entity would generally be considered a “reporting company” required to submit beneficial ownership information.

What Businesses Might Be Exempt from Reporting Beneficial Ownership Information?

Here are some common types of businesses that may be exempt from reporting beneficial ownership information:

  • Publicly traded companies listed on exchanges like the NYSE or NASDAQ
  • Banks, credit unions, and other financial institutions regulated by federal financial regulators
  • Insurance companies regulated by state insurance regulators
  • Investment companies/advisers regulated by the SEC, such as hedge funds, private equity firms, and SEC-registered investment advisers
  • Businesses that employ more than 20 full-time employees in the US and generate over $5 million in annual gross receipts/sales
  • Nonprofits that operate exclusively for religious, charitable, educational or other similar purposes and are tax-exempt under Section 501(c) of the Internal Revenue Code.
  • Companies owned solely by one or more other exempt entities (e.g., public companies, banks)
  • Pooled investment vehicles operated for the purpose of holding or investing assets, like real estate investment trusts
  • Publicly traded trusts regulated by the SEC

There are also exemptions for certain utilities, marketing cooperatives, and inactive or dormant companies with limited activities. FileForms can help determine if a specific business qualifies for an exemption.

  1. Certain types of securities reporting issuers.
  2. A U.S. governmental authority.
  3. Certain types of banks.
  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.
  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.
  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.
  12. Insurance companies defined in section 2 of the Investment Company Act of 1940.
  13. State-licensed insurance producers with an operating presence 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.
  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.
  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.
  19. Certain types of tax-exempt entities.
  20. Entities assisting a tax-exempt entity described in (xix) above.
  21. Large operating companies with more than 20 full-time employees, more than $5,000,000 in gross receipts or sales, and an operating presence at a physical office within the United States.
  22. The subsidiaries of certain exempt entities.
  23. Certain types of inactive entities that were in existence on or before January 1, 2020, the date the Corporate Transparency Act was enacted.

Identifying Beneficial Owners

If required to report, identify any individuals who directly or indirectly own 25% or more of the company or exercise substantial control. Substantial control includes senior officers and those who direct important decisions. 

Indirect ownership through other entities must also be considered. If you’re unsure who may be considered beneficial owners in your company, using FileForms can help.

Gathering Report Information

Collect details on the reporting company like legal name, addresses, and Taxpayer ID Number. You’ll also need a name, date of birth, address, and identification number for each beneficial owner. Accepted IDs include driver’s licenses, passports, and tribal IDs. 

Filing the Electronic Report

Beginning January 1, 2024, reports can be filed electronically on FinCEN’s secure website. Initial reports are due by January 1, 2025 for pre-existing companies or 30 days after the formation of new companies. Updates must be filed within 60 days when beneficial ownership changes. 

However, compiling the right information and submitting it correctly can be challenging.

FileForms was created to assist businesses and their advisers in submitting regulatory forms and reports in a timely, compliant, and stress-free manner. 

To ensure our clients can file BOI reports accurately and on time, we offer a cutting-edge technological platform, which allows us to rapidly aggregate entity and ownership information. We help you cut through the red tape and reduce the risk of errors that can lead to noncompliance fines and headaches.

Let FileForms Take the Stress Out of Your BOI Reporting

Companies should prepare now to meet initial reporting deadlines. The FileForms team is composed of industry domain specialists who have extensive knowledge in financial services, legal matters, tax regulations, and accounting practices.

Our experience enables us to effectively serve your business and continually develop innovative technological solutions aimed at streamlining corporate filing requirements. Learn more about how we may be able to help you by contacting us today.