A Guide to BOI Reporting

Guide to BOI Reporting: Introduction

Navigating the complexities of the Corporate Transparency Act (CTA) can be daunting for business owners, especially those at the helm of small to medium-sized companies.

The CTA’s reporting requirements are designed to improve transparency and combat financial crimes by requiring certain businesses to report their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).

This guide to BOI reporting will walk you through the steps necessary to comply with these requirements.

1. Determine If Your Company Needs to File a Report

The first step is straightforward: assess whether your business is subject to the CTA’s reporting requirements. If your company is an LLC, corporation, limited partnership, or similar entity created by filing a document with a secretary of state or a similar tribal body, then you are required to file a report. Most formal business structures will fall within this mandate.

2. Determine Your Due Date

The timeline for filing depends on when your entity was formed:

• Prior to January 1, 2024: Your company’s due date is January 1, 2025.
• Formed in 2024: Your company has 90 days from the filing of your formation documents.
• Created in 2025 or beyond: Your company must file within 30 days of formation.

Marking these deadlines on your calendar is recommended to ensure timely compliance.

3. Identify the Company’s Beneficial Owners

Identifying beneficial owners is a two-pronged task. Owners are individuals with at least a 25% “ownership interest” or those who have “substantial control” over the company. The latter may require a more nuanced approach, considering factors like senior officer status, authority over key decisions, or the power to appoint or remove significant positions. If in doubt about someone’s status, consulting with an expert can provide clarity.

4. Determine the Company Applicants

Only for entities formed on or after January 1, 2024, identifying the company applicants is necessary. These are individuals who filed the entities formation documents, whether they were directly filed or had a significant role in directing or overseeing the process. Scenarios can vary, from an attorney filing documents solo to a team effort involving paralegals or corporate service providers. If your entity was formed through less straightforward means, seeking expert advice is advisable.

5. Gather Required Information

Before filing, you’ll need to collect specific information about each beneficial owner and company applicant, including:

• First and last name
• Date of birth
• Residential address
• An identification number (from a driver’s license, state/local/tribal ID, or passport)
• An image of the reported ID

For those wary of handling sensitive data, encouraging individuals to obtain a FinCEN Identifier or employing secure collection services such as Secure Compliance can ease the process.

6. File the Initial Report

With all necessary information at hand, filing the initial report marks a significant step towards compliance. This process, while detailed, is made easier by careful preparation and organization in the preceding steps.

7. File Updated Reports as Needed

Changes to your company or its beneficial owners must be reported within 30 days. This includes updates to personal information, as well as structural changes that affect those who qualify as beneficial owners. Unlike company applicants, beneficial owners are required to keep their information current, a task simplified for those with a FinCEN Identifier.

Are You Prepared to File?

Complying with the CTA’s reporting requirements is a critical obligation for many business owners. By following the steps outlined in this guide, you can ensure your business meets these obligations efficiently and accurately. Remember, when in doubt, consulting with experts who specialize in regulatory compliance can provide valuable guidance and peace of mind.

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