A BOI Report has information as to who is the beneficial owner of a reporting entity.  The information as to legal name, any trade names, their address, their jurisdiction of formation, and their Taxpayer Identification Number (“TIN”) for a reporting entity and name, date of birth, address, and a unique identifying number from an identification document, such as a driver’s license or passport) for the beneficial owner(s).

It is a corporation, LLC, and any other entity created by the filing of a document with a secretary of state or any similar office in the U.S. (including U.S. territories and Indian reservations).  A reporting entity is also a foreign entity (including foreign country equivalent of a corporations and LLC) formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office in the U.S.

Is a person that owns directly or indirectly 25% or more of a reporting entity. A beneficial owner is also an individual that exercises substantial control over a reporting company such as a senior officer (i.e., CFO, COO, CEO, President, etc.), a person that has authority to appoint or fire a director or make any other important decisions.

For entities formed and created on January 1, 2024, and thereafter a company applicant must also be included on a BOI Report.  A company applicant is an individual who directly files the document that creates or registers the company (i.e., attorney, registered agent, etc.) and the individual who is primarily responsible for directing or controlling the filing.  Entities formed before January 1, 2024, do not include a company applicant on a BOI Report.

Yes, there are 23 specific exceptions, but unfortunately a vast majority of small businesses don’t qualify and are subject to this reporting.  The most encompassing exception is the Large Operating Exception.  For a company to meet this exception, the company must have more than 20 employees in the U.S., more than $5 million in gross receipts in the U.S. on their most recent IRS tax return, AND a physical office in the U.S.

A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial beneficial ownership information report. A reporting company created or registered on or after January 1, 2024, will have 90 days to file its initial beneficial ownership information report after formation.

An updated report must generally be filed with FinCEN within 30 days of any change of information in the BOI report.  FinCEN has provided that if a correction of a mistake or omission is within 90 days of the deadline for the original report, a reporting company may avoid being penalized. However, FinCEN has also provided that civil and criminal penalties will apply if one disregards their BOI reporting obligations.

Companies who willfully provide false information (including a false or fraudulent identifying photograph or document) or fail to report by the filing deadline can face a civil penalty of up to $500 for each day the violation continues or has not been remedied. In addition, they can be fined up to $10,000 and/or face up to 2 years of imprisonment.