FinCEN BOI Reporting Obligations

Reinke Law would like to alert you to NEW FINCEN BOI reporting requirements that may very well be applicable to you and your business. 

What’s this all about?

The Corporate Transparency Act (the “CTA”) was enacted by Congress in 2021 as part of the National Defense Authorization Act.  The CTA includes significant reforms to anti-money laundering laws and is intended to help prevent and combat money laundering, terrorist financing, corruption, and tax fraud.

So what does that have to do with me?

Beginning on January 1, 2024, as part of the implementation of the CTA, the vast majority of corporations, limited liability companies, and similar entities incorporated or organized in the United States or authorized to do business in the United States (or any of its 50 states) will be required to report their beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN). There are potential penalties (criminal and civil), including fines of up to $500 per day up to $10,000 and potentially imprisonment if you fail to file.  Senior officers of an entity that fails to file may be held personally accountable for that failure.

Do I have to file a BOI FinCEN Report?

Before getting into the specific reporting requirements, you will of course want to know if your company is required to file at all.  The reporting rules do not apply to general partnerships, most trusts, certain highly regulated companies, and large operating companies.  Overall, there are twenty-three (23) exemptions from filing, but the most likely exemption for your entity is if it qualifies as a “large operating company.” 

In order to qualify as a large operating company, you must:

• Have more than twenty (20) full-time employees in the United States;
• Have an operating presence at a physical office within the United States; AND
• Have filed a federal income tax or information return in the United States for the prior year demonstrating more than $5 million in gross receipts or sales.

Notable other exemptions include securities reporting issuers (e.g., public companies), banks, tax-exempt entities, inactive entities, and subsidiaries of certain exempt entities.  The full list of exemptions, explanations, and check-the-box tests for entities is available in the Small Entity Compliance Guide available on the fincen.gov website.

What do I have to report?

If your company does not meet one of the exemptions, your company is a reporting company and will have to report certain company information, beneficial ownership information, and company applicant information.

Company Information

Company Information to be reported includes:

• Full legal name of the company;
• Any trade names used by the company;
• Address for the principal place of business;
  • PO Box and 3^rd Party addresses are NOT accepted
  • Foreign companies without a principal place of business must report the address the company uses to conduct business in the United States
• Jurisdiction in which the company was formed or registered; and
• An IRS issued Taxpayer Identification Number (TIN)
  • Foreign companies without a TIN must provide a foreign jurisdiction equivalent of a TIN and identify the issuing jurisdiction.

Beneficial Ownership Information

Beneficial Ownership Information to be reported includes:

• Full legal name;
• Date of birth;
• Current residential or business street address;
• A unique identifying number from a non-expired, government-issued photo ID, such as a U.S. passport or state driver’s license; and
  • Foreign passports are accepted if no U.S. issued ID is available
• An image of the government-issued photo ID from which the number was provided.

A “Beneficial Owner” is an individual that (i) is able to exercise substantial control over a reporting company, whether directly or indirectly, or (ii) who owns 25% or more of the reporting company’s ownership interests (e.g., stock or membership interests).

Individuals are deemed to exercise “substantial control” over a reporting company if:

• They are a senior officer of the reporting company, such as the company’s chief executive officer, president, chief financial officer, or other high level officer;
• They have the authority to appoint or remove a senior officer or a majority of the board of directors of the reporting company (or similar governing body of the company);
• They are an important decision maker for the company having the ability to control, direct, determine, or substantially influence important decisions regarding the company’s business, finances, or structure; or
• They otherwise exercise substantial control over the reporting company.

Company Applicant Information

For reporting companies formed on or after January 1, 2024, a reporting company must also identify at least one and up to two company applicants.  A “company applicant” is either (i) a direct filer who physically or electronically filed the document that created the domestic (US) reporting company or registered the foreign reporting company to do business in the United States, or (ii) an “individual who directs or controls the filing action” which means the person primarily responsible for directing or controlling the document filed to create the entity or register the entity.  A “company applicant” may be the company founder or an attorney or service used to form the entity, or both.  If a reporting company has one individual who directly filed the document and another who controlled or directed the filing, both must be identified.

When do I have to report?

• Entities created before January 1, 2024 will have all of 2024 to submit their initial report.
• Entities created on or after January 1, 2024 and before January 1, 2025, will have ninety (90) days from creation or registration to submit the report.
• Entities created on or after January 1, 2025 will have thirty (30) days from creation or registration to submit the report.

How do I report?

You can file your report through the beneficial ownership secure system (BOSS) created by FinCEN. Details can be found at https://boiefiling.fincen.gov/.  If you would like Reinke Law to help you with your BOI FinCEN report, we are happy to offer a flat fee, as set forth below, and you can get started by clicking here.

Are there follow up reporting requirements?

Yes.  If any of the information reported changes, you must file an amendment to your BOI FinCEN report within thirty (30) days.

For example, you will have to file a follow up report if:

• Your reporting company’s principal address changes or the address you primarily work from;
• A Beneficial Owner is added or removed from your reporting company;
• A Beneficial owner changes their primary residential address;
• Your reporting company adds a new tradename/DBA; and/or
• You qualify for a new exemption or cease to qualify for an exemption.

How long is this going to take?

According to the Journal of Accountancy, a simple report with one Beneficial Owner is expected to take an average of 90 minutes per response and for those entities with complex structures (8 or more Beneficial Owners) up to 11 hours.

Can you help me?

Yes, Reinke Law can assist with the preparation and filing of your FinCEN BOI reports, dramatically reducing your time burden.

Reinke Law has automated a lot of the process from onboarding through filing your FinCEN BOI report, with online features to:

• Determine if there is an exemption from filing available to your company;
• Gather your Company’s and each of its Beneficial Owners’ required information;
• Make your Company’s initial FinCEN BOI report filing (and subsequent amendments, as needed);
• Store the information about your Company and its Beneficial Owners to enable you to quickly file any amendments to your filing that may be required;
• Provide monthly reminders to each of your Company’s Beneficial Owners to report any changes to their information which would necessitate an amended FinCEN BOI report filing; and
• To ask and get answers to questions you may have along the way via chat functionality with Reinke Law professionals.

What are your fees for facilitating the FinCEN BOI reporting?

• $599 for each initial Company report;
• $199 for each Company amended report;
• $19 per year for data storage after the first 6 months free; and
• For clients with multiple entities having the same Beneficial Ownership structure, each initial Company report after the first will receive a $100 discount per initial report.

There is no fee if your company is determined to have an available exemption.

How do I get started?

If you would like to engage Reinke Law to assist you with your FinCEN BOI reporting requirements, you can get started by completing an initial intake form available here.