Beneficial Ownership Information Reporting

Basic Requirements of the BOI Reporting Rule

• Who Has to Report?
  • There are two types of Reporting Companies:

  • Domestic Reporting Companies: subject to the exemptions below, corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state, or any similar state or tribal office, in the U.S.
  • Foreign Reporting Companies: subject to the exemptions below, entities formed under the law of a foreign country that have registered to do business in the U.S. by the filing of a document with a secretary of state, or any similar state or tribal office, in the U.S.

  • Certain trusts and other entities not created by the filing of a document with a secretary of state, or similar state or tribal office, are excluded from the definition of Reporting Company.
• Who Is Exempted From Reporting?

  There are 23 types of entities that are exempt from the BOI reporting requirements. Generally, exempt entities are publicly traded, large companies, and/or subject to regulation; the idea being that the beneficial owners of such entities are already known to the government and, for some entity types, the public. An exempt entity does not need to report to FinCEN that it is exempt from the BOI reporting requirements if it has always been exempt. However, if a company filed a BOI Report and later qualifies for an exemption, that company should file an updated BOI Report to indicate that it is newly exempt.

  Below is a short-title list of exempt categories. You should carefully review the qualifying criteria or seek legal advice before concluding an entity is exempt from the BOI reporting requirements.

  Securities reporting issuer	Governmental authority	Bank	Credit union	Depository institution holding company	Money services business
  Broker or dealer in securities	Securities exchange or clearing agency	Other Exchange Act registered entity	Investment company or investment adviser	Venture capital fund adviser	Insurance company
  State-licensed insurance producer	Commodity Exchange Act registered entity	Accounting firm	Public utility	Financial market utility	Pooled investment vehicle
  Tax-exempt entity	Entity assisting a tax-exempt entity	Large operating company	Subsidiary of certain exempt entities	Inactive entity

• What Do I Report?

  Information about the Reporting Company

  • Legal name
  • Trade names, e.g., d/b/a names
  • Current street address of principal place of business in the U.S. (or, if not in the U.S., the primary location in the U.S. where it conducts business)
  • Jurisdiction of formation or registration
  • Taxpayer Identification Number (and, if issued by a foreign jurisdiction, the name of such jurisdiction).

  Information about Beneficial Owners

  • For each individual Beneficial Owner
    
    
    • Individual’s name
    • Date of birth
    • Residential address
    • Identifying number from and image of an acceptable ID document, e.g., a passport or U.S. driver’s license, and name of issuing state or jurisdiction.

  Information about Company Applicant

  • For each individual Company Applicant
    
    
    • Individual’s name
    • Date of birth
    • Address
      
      
      • If Company Applicant works in corporate formation (e.g., attorney), can be the business address. Otherwise, must be the residential address.
    • Identifying number from and image of an acceptable ID document, e.g., a passport or U.S. driver’s license, and name of issuing state or jurisdiction.
• Who is a Beneficial Owner?
  • An individual who either directly or indirectly (1) exercises “substantial control” over the Reporting Company; or (2) owns or controls at least 25% of the Reporting Company’s ownership interests.

  1. “Substantial control”
     
     
     • An individual in any of the 4 categories below exercises “substantial control” of the Reporting Company
       
       
       • A senior officer, e.g., president, chief executive officer, chief financial officer, chief operating officer, general counsel, or person performing similar functions regardless of title
       • Has authority to appoint or remove certain officers or a majority of directors
       • Important decision-makers
         
         
         • Individuals who direct, determine, or have substantial influence over decisions regarding:
           
           
           • Nature, scope, product offerings, or geographies of the business
           • Finances, including, e.g., sale of principal assets, major expenditures or investments, or compensation for senior officers
           • Structure, e.g., reorganization and mergers, amendments of substantial governance documents
         • Individuals with any other form of substantial control
           
           
           • Per FinCEN: “Control exercised in new and unique ways can still be substantial.  For example, flexible corporate structures may have different indicators of control than the indicators included” above.
     • "Employee" Exception:
       
       
       • If the individual:
         
         
         • is an employee as defined by 26 CFR 54.4980H-1(a)(15); 
         • exercises substantial control over or receives economic benefits from the Reporting Company solely from his or her employment status; and
         • is not a senior officer,
       • Then such individual does not have to be reported as a Beneficial Owner.
  2. Owns or controls at least 25% of the Reporting Company's ownership interests
     
     
     •  Shares of equity, stock, voting rights, or any other mechanism used to establish ownership.

  • Exceptions:  There are five exceptions to the definition of Beneficial Owner: (1) minor children; (2) nominees, intermediaries, custodians, and agents; (3) employees (discussed above); (4) inheritors; and (5) creditors.

  Reporting Companies should consult FinCEN regulations and guidance, or an attorney, to determine if individuals fall within these Beneficial Owner exceptions.

• Who is a Company Applicant?
  • Only Reporting Companies created or registered on or after January 1, 2024 will need to report their Company Applicants.
  • Each Reporting Company required to report Company Applicant information will have at least one Company Applicant, and at most two Company Applicants:
    
    
    • The individual who directly files the document that creates or registers the company; and 
    • If more than one person is involved in the filing, the individual who is primarily responsible for directing or controlling the filing. 
  • Company Applicants must be individuals, not companies or legal entities.
  • Are accountants and lawyers “Company Applicants”?
    
    
    • They may be if:
      
      
      • They directly filed the document that created or registered the Reporting Company (this would include, e.g., a paralegal who directly files the document); or
      • They are primarily responsible for directing or controlling the filing of the creation or registration document.
• How Do I Report?
  • The form to report BOI is not yet available. Once it is, the form will be posted on FinCEN’s BOI webpage.
  • BOI Reports will be filed through a secure filing system on FinCEN’s website.
  • Reporting Companies will be able to use third-party service providers to submit BOI Reports.
  • FinCEN will not accept BOI Reports prior to January 1, 2024.
  • There will be no fee for submitting BOI Reports. 
• When Do I Report?
  • Reporting Companies created or registered to do business before January 1, 2024 will have until January 1, 2025 to file its initial BOI Report.
  • Reporting Companies created or registered to do business on or after January 1, 2024 and before January 1, 2025 will have 90 days from receiving notice that its creation or registration is effective to file its initial BOI Report.
  • Reporting Companies created or registered to do business on or after January 1, 2025 will have 30 days from receiving notice that its creation or registration is effective to file its initial BOI Report.
  • FinCEN will not accept any BOI Report prior to January 1, 2024.
• What if There is a Change to my BOI?

  Updated Reports

  • If there is any change to the required information about the Reporting Company or Beneficial Owners in a filed BOI Report, an updated report must be filed no later than 30 days after the date of change. 
  • Changes to previously reported Company Applicant information are not required to be reported.
  • Changes requiring an updated BOI Report include: change to the information previously reported; change in beneficial owners; change to a beneficial owner’s name, address, or unique identifying number previously provided to FinCEN; or the Reporting Company newly becoming exempt from filing a BOI Report.

  Corrected Reports

  • If a BOI Report is inaccurate, it must be corrected no later than 30 days after the date your company becomes aware of the inaccuracy or has reason to know of it. 
• How Can I use a FinCEN Identifier in Place of Beneficial Owner, Company Applicant or Reporting Company Required Information?

  What is a FinCEN Identifier?

  • 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, described below, to FinCEN.

  How can I use a FinCEN Identifier?

  • If a Beneficial Owner or Company Applicant obtains a FinCEN Identifier, the Reporting Company may report the FinCEN Identifier of that individual in place of the required personal information. 
  • If a related entity has obtained a FinCEN Identifier, a Reporting Company may report the other entity’s FinCEN Identifier and full legal name in place of required beneficial ownership information if:
    
    
    • The other entity has obtained a FinCEN Identifier and provided that FinCEN Identifier to the Reporting Company;
    • An individual is or may be a beneficial owner of the Reporting Company by virtue of an interest in the Reporting Company that he or she holds through an ownership interest in the other entity; and
    • The beneficial owners of the other entity and of the Reporting Company are the same individuals

  How do individuals request a FinCEN Identifier?

  • Individuals will be able to request a FinCEN Identifier on or after January 1, 2024 by completing an electronic web form. 
  • Individuals will need to provide:
    
    
    • Full legal name
    • Date of birth
    • Address
    • Unique identifying number and issuing jurisdiction from an acceptable ID document, and an image of the ID document.

  How does a Reporting Company Request a FinCEN Identifier?

  • Reporting Companies may request a FinCEN Identifier by checking a box on the BOI Report when it is submitted.  
  • If a Reporting Company wishes to receive a FinCEN Identifier after submitting its initial BOI Report, it may submit an updated BOI Report requesting the identifier.  
• Who Can Access BOI Reported to FinCEN?
  • FinCEN has yet to implement final rules governing access to BOI filed with FinCEN. However, under the CTA and FinCEN’s proposed rules, as a general matter: 
    
    
    • Federal, State, local and Trial officials, and certain foreign officials who submit a request through a US Federal government agency, will be able to obtain BOI for authorized activities related to national security, intelligence, and law enforcement.
    • Financial institutions will be able to access BOI for the sole purpose of facilitating compliance with its CDD requirements under applicable laws and regulations. 
      
      
      • Financial institutions will need the consent of the Reporting Company.
      • Financial institutions’ requests will be required to be specific to an individual Reporting Company; they will not be able to request open-ended queries. 
  • Financial institutions’ regulators will have access to BOI when they are assessing a financial institutions’ compliance with CDD requirements.