BOI Updating Requirements

With the introduction of the Corporate Transparency Act (CTA), the importance of maintaining current Beneficial Ownership Information (BOI) reports has never been more critical. As an estimated 1.5 million “initial reports” have already been filed, entities must now ensure that their records are meticulously kept up-to-date so that subsequent “updated reports” will be filed with FinCEN. This necessitates not only informing clients about what specific changes trigger the need for a filing but also establishing robust internal processes to guarantee these updates are submitted on time. With this in mind, what are the BOI updating requirements?

Updates must be filed within 30 days of any relevant change, covering everything from shifts in ownership percentages to alterations in corporate structure or beneficial owner details. Below are some examples of what may cause a reporting company to file an updated report.

Changes in Company Information

A fundamental trigger for an updated BOI report (BOIR) is any change to the information related to the reporting company itself. These changes can include:

Registering a new trade or doing-business-as name: If a company decides to operate under a new name, this must be accurately reflected in an updated BOI report.
Changes in company structure: Modifications to the legal structure, mergers, or other corporate events that affect the company’s ownership and management structure need to be reported.
Contact information changes: Updated addresses or contact details should be promptly reflected in the report to ensure that regulatory authorities can reach the company when necessary.

Alterations in Beneficial Ownership

The heart of a BOI report lies in its disclosure of beneficial owners – the individuals or entities that own or control a significant portion (25% or more) of the business. The following scenarios can trigger the need for an updated BOI report:

Appointment of new beneficial owners: When a new individual or entity acquires or assumes control of a substantial portion of the business, they must be accurately documented.
Change in ownership structure: The sale of shares or assets that results in a change in ownership structure, especially if it involves someone reaching or surpassing the 25 percent ownership interest threshold, requires an updated report.
Departure or resignation of a beneficial owner: If a beneficial owner leaves the company or resigns from their position of significant control, this change must be reported.
Death of a beneficial owner or inheritance of ownership interest: When a beneficial owner passes away, the updated report will need to exclude the owner and replace (if applicable) with any new beneficial owners that result from the change. Those who have ownership interest solely through the right of inheritance are one of the 5 exceptions to the definition of a beneficial owner, however, once they do inherit the interest an update must be filed to report the new owner.

Modifications in Beneficial Owner Information

Individuals or entities identified as beneficial owners in a BOI report are required to provide specific information. Changes in this information trigger the need for an update, such as:

Change of name: If a beneficial owner obtains a new legal name, it should be promptly reflected in the report.
Address updates: Alterations in a beneficial owner’s address should be accurately documented in the report.
Unique identifying numbers: Any changes to unique identifying numbers, such as passport or driver’s license information, need to be updated to maintain accuracy. Along with this, companies may need to provide an image of the updated identifying document, further ensuring the authenticity of the changes.

It’s essential to understand that obtaining FinCEN Identifiers (FinCEN IDs) can streamline the reporting process and potentially eliminate the need for updated reports for the changes listed above. When individuals register for a FinCEN ID through their login.gov account, they directly submit their personal information to FinCEN. This ID can then be included in the entity’s BOIR. Consequently, if there is a change in the individual’s personal details, they simply update their information via their login.gov account. Since the FinCEN ID connects the owner to the entity and FinCEN maintains their current details independently, the entity itself is not required to file an updated report for these kinds of changes.

When to Provide a Corrected BOI Report

If the information in a report about beneficial ownership is found to be inaccurate, your company is required to rectify it within 30 days of becoming aware of the inaccuracies or having reason to know about them. This correction pertains to any inaccuracies in the mandatory details concerning your company, its beneficial owners, or its applicants.

The Importance of Timely Updates

Failing to update a BOI report within 30 days of the change (there is a proposed extension to 90 days for 2024 only) can result in compliance issues, financial penalties, and legal consequences. To ensure that businesses operate within the bounds of the law, it is essential to stay vigilant and promptly respond to triggers that necessitate an updated BOI report.

Get in Touch

Table of Contents

BOI Updating Requirements: When to Provide an Updated BOI Report