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How to File Your Beneficial Ownership Report in 11 Easy Steps

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By this point, you’ve probably already heard about the new Beneficial Ownership reporting requirement and started thinking about who in your business qualifies as a beneficial owner. 

The regulation helps FinCEN maintain a better picture of the U.S. business landscape when investigating financial crimes. But it also means many small businesses are now responsible for securing, submitting, and maintaining the sensitive personal information of their most influential employees and advisors. 

The good news is that businesses established on or before January 1, 2024, have one year to file, and businesses established in 2024 have a 90-day reporting window.

However, most business owners are still unsure about the necessary procedures for filing a comprehensive and accurate report.

FinCEN has even prepared a compliance guide to assist in determining beneficial ownership. However, the guide weighs in at 55 pages, and the content is very dense.

The process gets trickier for businesses with multiple beneficial owners, businesses that file on behalf of clients, and businesses with a growing or rotating team of advisors, C-Suite executives, and investors.

Below are 11 steps that you need to follow to ensure that your report is complete and all necessary information is included.

1. Determine if You Are a Reporting Entity.

The Corporate Transparency Act (CTA) will require millions of businesses to file a BOI report. Before completing the BOI Report, it’s important to determine if you are a reporting entity

The CTA requires reports from companies that fit into two general categories: domestic reporting companies and foreign reporting companies. FinCEN defines those categories as follows: 

  • A domestic reporting company is “Any corporation, limited liability company, or other similar entity that is created by the filing of a document with a secretary of state or similar office under the law of a state or Indian tribe.”
  • A foreign reporting company is defined as “Any corporation, limited liability company, or other similar entity that is created by the filing of a document with the secretary of state or a similar office under the law of a foreign country and registered to do business in the United States by the filing of a document with a secretary of state or similar office under the law of a state or Indian tribe.”

However, certain businesses that fit into these categories may qualify as exempt from the BOI reporting requirements.

2. Determine if You Qualify for an Exemption.

The 23 separate exemptions include many financial institutions, investment funds, and some non-profits. Those exemptions are: 

  1. Securities reporting issuer
  2. Governmental authority
  3. Bank
  4. Credit union
  5. Depository institution holding company
  6. Money services business
  7. Broker or dealer in securities
  8. Securities exchange or clearing agency
  9. Other Exchange Act registered entity
  10. Investment company or investment adviser
  11. Venture capital fund adviser
  12. Insurance company
  13. State-licensed insurance producer
  14. Commodity Exchange Act registered entity
  15. Accounting firm
  16. Public utility
  17. Financial market utility
  18. Pooled investment vehicle
  19. Tax-exempt entity
  20. Entity assisting a tax-exempt entity
  21. Large operating company
  22. Subsidiary of certain exempt entities
  23. Inactive entity

File Forms has a free quiz to help businesses determine whether FinCEN considers them a reporting entity

3. Identify Beneficial Owners.

As far as FinCEN is concerned, the definition of beneficial ownership goes beyond financial control. They define beneficial owners as anyone “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.

This definition can include senior officers and C-Suite executives like CEOs, presidents, and even general counsel. Control isn’t strictly tied to financial equity in this definition, meaning beneficial ownership also includes those with decision-making influence. 

4. Collect Beneficial Ownership Data.

For each beneficial owner, your company must submit their:

  • Legal Name
  • Date of Birth
  • Permanent Home Address
  • A Government-issued Identifying Document (driver’s license, passport, etc.)

The report also requires any person filing the report (or “company applicant”) to submit the same information. Preparers should also be ready to supply the reporting company’s:

  • Legal Company Name
  • Alternate Name
  • Tax Identification Type
  • Tax Identification Number
  • Jurisdiction of Formation
  • Current U.S. Address

5. Choose FinCEN Reporting Process.

FinCEN offers filers three ways to file their BOI reports: via PDF, a web BOI reporting form, or system-to-system API, but those options require your organization to take on all of the effort and risk. 

The PDF option allows organizations to work on the information at their own pace. But it also means the personal information of company stakeholders may wind up circulating the organization during the information collection process.

The FinCEN web form can create similar informational security risks and requires a complete re-submission any time the information needs to be updated. 

Many businesses opt to find a filing partner who can offer legal guidance, filing assistance, aggregate data, informational security, and time and money savings.

FileForms, for instance, uses its proprietary technology to securely aggregate and save beneficial ownership information, making it easy to complete bulk and repeat filings. 

6. Verify Beneficial Ownership Information.

FinCEN’s filing requirements aren’t complicated on their face, but the fines for filing incorrect BOI reporting forms are steep. FinCEN can jail parties who file false BOI reports for up to two years and fine reporting companies up to $591 a day (up to $10,000 total) and even jail time for providing inaccurate or false information.  

Double-check each box, and consider reviewing the filing with a BOI expert.

7. Certify and Attest.

Just like with step 6, the attestation process is simple, but be sure to read over everything again to be extra safe. 

If the attestation portion of the process makes you nervous, you may want to find a filing partner who can help you review your beneficial ownership information for accuracy and offer up-to-date guidance regarding your business’s reporting obligations. 

8. Keep Documentation.

FinCEN gives companies the option to download a transcript of their BOI submission. Be sure to save this document in your own records to help when the form needs to be updated. 

9. Monitor for Updates.

The BOI report filing requirements are new, and FinCEN has already filed additional guidance since the regulation took effect on January 1. Be sure to monitor the reporting requirements. 

You will also be required to update your filing if information about your beneficial owners changes—a new driver’s license number or change of address, for example. Many companies will also have to file updated reports for new hires, departures, and changes in investors. 

10. Address Reporting Issues.

In the event you, your advisors, or FinCEN identify discrepancies, inaccuracies, or false reports, it’s essential to file a corrected report immediately. As detailed in step 6, the penalties for an inaccurate report can be harsh. 

11. Seek Professional Assistance.

The broad definitions imposed by the CTA give FinCEN wiggle room to implement the new regulatory requirement, but they can also create gray areas for filing companies. If you encounter complexities or challenges during the filing process, seek legal or financial experts with experience in BOI reporting form compliance. Finding a BOI advisor or partner who stays current on the evolving regulations is crucial. 

Still Confused?

BOI experts like those at FileForms help businesses, from small retailers to large corporations, save time, secure information, and remain compliant. 

FileForms even partners with financial and legal advisors to help their clients file quickly and accurately.

Published: March 7, 2024
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