Beneficial Ownership Information Reporting

Basic Requirements of the BOI Reporting Rule

• Who Has to Report?
  • There are two types of Reporting Companies:

  • Domestic Reporting Companies: subject to the exemptions below, corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state, or any similar state or tribal office, in the U.S. or any U.S. territory
  • Foreign Reporting Companies: subject to the exemptions below, entities formed under the law of a foreign country that have registered to do business in the U.S. by the filing of a document with a secretary of state, or any similar state or tribal office, in the U.S. or any U.S. territory

  • Certain trusts and other entities not created by the filing of a document with a secretary of state, or similar state or tribal office, are excluded from the definition of Reporting Company.
• Who Is Exempted From Reporting?

  There are 23 types of entities that are exempt from the BOI reporting requirements. Generally, exempt entities are publicly traded, large companies, and/or subject to regulation; the idea being that the beneficial owners of such entities are already known to the government and, for some entity types, the public. An exempt entity does not need to report to FinCEN that it is exempt from the BOI reporting requirements if it has always been exempt. However, if a company filed a BOI Report and later qualifies for an exemption, that company should file an updated BOI Report to indicate that it is newly exempt.

  Below is a short-title list of exempt categories. You should carefully review the qualifying criteria or seek legal advice before concluding an entity is exempt from the BOI reporting requirements.

  Securities reporting issuer	Governmental authority	Bank	Credit union	Depository institution holding company	Money services business
  Broker or dealer in securities	Securities exchange or clearing agency	Other Exchange Act registered entity	Investment company or investment adviser	Venture capital fund adviser	Insurance company
  State-licensed insurance producer	Commodity Exchange Act registered entity	Accounting firm	Public utility	Financial market utility	Pooled investment vehicle
  Tax-exempt entity	Entity assisting a tax-exempt entity	Large operating company	Subsidiary of certain exempt entities	Inactive entity

• What Do I Report?

  Information about the Reporting Company

  • Legal name
  • Trade names, e.g., d/b/a names
  • Current street address of principal place of business in the U.S. (or, if not in the U.S., the primary location in the U.S. where it conducts business). Reporting Companies must provide a street address; reporting a P.O. box address is not allowed.
  • Jurisdiction of formation or registration
  • Taxpayer Identification Number (and, if issued by a foreign jurisdiction, the name of such jurisdiction).

  Information about Beneficial Owners

  • For each individual Beneficial Owner
    
    
    • Individual’s name
    • Date of birth
    • Current residential address (even if not a permanent residential residence)
    • Identifying number from and image of an acceptable ID document, e.g., a passport or U.S. driver’s license, and name of issuing state or jurisdiction.
  • A Reporting Company may report a parent company’s name in lieu of information about its Beneficial Owners if its Beneficial Owners only hold their ownership interest in the Reporting Company through the parent company and the parent company is an exempt entity.

  Information about Company Applicant

  • For each individual Company Applicant
    
    
    • Individual’s name
    • Date of birth
    • Address
      
      
      • If Company Applicant works in corporate formation (e.g., attorney), can be the business address. Otherwise, must be the residential address.
    • Identifying number from and image of an acceptable ID document, e.g., a passport or U.S. driver’s license, and name of issuing state or jurisdiction.

  It is the Reporting Company’s responsibility to report all of the above information to FinCEN. 

  The Reporting Company is responsible for verifying the information it receives from its Beneficial Owners and Company Applicants before reporting it to FinCEN.

• Who is a Beneficial Owner?
  • An individual 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.

  1. “Substantial control”
     
     
     • An individual in any of the 4 categories below exercises “substantial control” of the Reporting Company
       
       
       • A senior officer, e.g., president, chief executive officer, chief financial officer, chief operating officer, general counsel, or person performing similar functions regardless of title
       • Has authority to appoint or remove certain officers or a majority of directors
       • Important decision-makers
         
         
         • Individuals who direct, determine, or have substantial influence over decisions regarding:
           
           
           • Nature, scope, product offerings, or geographies of the business
           • Finances, including, e.g., sale of principal assets, major expenditures or investments, or compensation for senior officers
           • Structure, e.g., reorganization and mergers, amendments of substantial governance documents
         • Individuals with any other form of substantial control
           
           
           • Per FinCEN: “Control exercised in new and unique ways can still be substantial.  For example, flexible corporate structures may have different indicators of control than the indicators included” above.
     • "Employee" Exception:
       
       
       • If the individual:
         
         
         • is an employee as defined by 26 CFR 54.4980H-1(a)(15); 
         • exercises substantial control over or receives economic benefits from the Reporting Company solely from his or her employment status; and
         • is not a senior officer,
       • Then such individual does not have to be reported as a Beneficial Owner.
  2. Owns or controls at least 25% of the Reporting Company's ownership interests
     
     
     • Shares of equity, stock, voting rights, or any other mechanism used to establish ownership.
     • Subject to limited exceptions, if a corporate entity owns 25% or more of the ownership interests of the Reporting Company, the Reporting Company must report the individuals who own or control at least 25% of the ownership interests through the corporate entity. The Reporting Company should not report the corporate entity that acts as an intermediate for the individuals.

  • Exceptions:  There are five exceptions to the definition of Beneficial Owner: (1) minor children; (2) nominees, intermediaries, custodians, and agents; (3) employees (discussed above); (4) inheritors; and (5) creditors.

  Reporting Companies should consult FinCEN regulations and guidance, or an attorney, to determine if individuals fall within these Beneficial Owner exceptions.

• Who is a Company Applicant?
  • Only Reporting Companies created or registered on or after January 1, 2024 will need to report their Company Applicants.
  • Each Reporting Company required to report Company Applicant information will have at least one Company Applicant, and at most two Company Applicants:
    
    
    • The individual who directly files the document that creates or registers the company; and 
    • If more than one person is involved in the filing, the individual who is primarily responsible for directing or controlling the filing. 
  • Company Applicants must be individuals, not companies or legal entities.
  • Are accountants and lawyers "Company Applicants"?
    • They may be if:
      • They directly filed the document that created or registered the Reporting Company (this would include, e.g., a paralegal who directly files the document); or
      • They are primarily responsible for directing or controlling the filing of the creation or registration document.
  • To determine who is primarily responsible for directing or controlling the filing of the document, consider who is responsible for making the decisions about the filing of the document, such as how the filing is managed, what content the document includes, and when and where the filing occurs.
• How Do I Report?
  • The form to report BOI is available on FinCEN’s BOI webpage.
  • BOI Reports will be filed through a secure filing system on FinCEN’s website.
  • Anyone authorized to act on behalf of a Reporting Company may file a BOI Report. When submitting the BOI Report, individual filers should be prepared to provide basic contact information about themselves, including their name and email address or phone number.
  • Reporting Companies will be able to use third-party service providers to submit BOI Reports.
  • There will be no fee for submitting BOI Reports. 
• When Do I Report?
  • Reporting Companies created or registered to do business before January 1, 2024 will have until January 1, 2025 to file its initial BOI Report.
  • Reporting Companies created or registered to do business on or after January 1, 2024 and before January 1, 2025 will have 90 days from receiving notice that its creation or registration is effective to file its initial BOI Report.
  • Reporting Companies created or registered to do business on or after January 1, 2025 will have 30 days from receiving notice that its creation or registration is effective to file its initial BOI Report.
  • The date of creation or registration for a Reporting Company is the earlier of the date on which: (1) the Reporting Company receives actual notice that its creation (or registration) has become effective; or (2) a secretary of state or similar office first provides public notice, such as through a publicly accessible registry, that the domestic Reporting Company has been created or the foreign Reporting Company has been registered.
• What if There is a Change to my BOI?

  Updated Reports

  • If there is any change to the required information about the Reporting Company or Beneficial Owners in a filed BOI Report, an updated report must be filed no later than 30 days after the date of change. 
  • Changes to previously reported Company Applicant information are not required to be reported.
  • Changes requiring an updated BOI Report include: change to the information previously reported; change in beneficial owners; change to a beneficial owner’s name, address, or unique identifying number previously provided to FinCEN; or the Reporting Company newly becoming exempt from filing a BOI Report. (If such newly exempt entity subsequently loses its exempt status, it must file an updated BOI Report.)

  Corrected Reports

  • If a BOI Report is inaccurate, it must be corrected no later than 30 days after the date your company becomes aware of the inaccuracy or has reason to know of it. 
• How Can I use a FinCEN Identifier in Place of Beneficial Owner, Company Applicant or Reporting Company Required Information?

  What is a FinCEN Identifier?

  • A unique identifying number that FinCEN will issue to an individual or Reporting Company upon request after the individual or Reporting Company provides certain information, described below, to FinCEN.

  How can I use a FinCEN Identifier?

  • If a Beneficial Owner or Company Applicant obtains a FinCEN Identifier, the Reporting Company may report the FinCEN Identifier of that individual in place of the required personal information. 
  • If a related entity has obtained a FinCEN Identifier, a Reporting Company may report the other entity’s FinCEN Identifier and full legal name in place of required beneficial ownership information if:
    
    
    • The other entity has obtained a FinCEN Identifier and provided that FinCEN Identifier to the Reporting Company;
    • An individual is or may be a beneficial owner of the Reporting Company by virtue of an interest in the Reporting Company that he or she holds through an ownership interest in the other entity; and
    • The beneficial owners of the other entity and of the Reporting Company are the same individuals

  How do individuals request a FinCEN Identifier?

  • Individuals may request a FinCEN Identifier by completing an electronic web form.  
  • Individuals will need to provide:
    
    
    • Full legal name
    • Date of birth
    • Address
    • Unique identifying number and issuing jurisdiction from an acceptable ID document, and an image of the ID document.

  How does a Reporting Company Request a FinCEN Identifier?

  • Reporting Companies may request a FinCEN Identifier by checking a box on the BOI Report when it is submitted.  
  • If a Reporting Company wishes to receive a FinCEN Identifier after submitting its initial BOI Report, it may submit an updated BOI Report requesting the identifier.  
• What are the Penalties for Not Complying with the BOI Reporting Requirements?
  • Potential violations include:
    
    
    • Willfully failing to file a BOI Report;
    • Willfully filing false BOI; or
    • Willfully failing to correct or update previously reported BOI.
  • A person who willfully violated the BOI reporting requirements may be subject to:
    
    
    • Civil penalties up to $500 for each day the violation continues; or
    • Criminal penalties of up to two years imprisonment and a fine of up to $10,000.
  • Who can be held liable for violating BOI reporting requirements?
    
    
    • Corporate entities (Reporting Company or other entity).
    • Individuals
      
      
      • Person who actually files (or attempts to file) false information with FinCEN.
      • Person (including a Beneficial Owner or a Company Applicant) who willfully provides the filer with false information to report to FinCEN.
      • For willful failure to report complete or updated BOI, individuals (including Beneficial Owners and Company Applicants) can be liable if they either cause the failure or are a “senior officer” at the Reporting Company at the time of the failure.  
• Who Can Access BOI Reported to FinCEN?
  • On December 22, 2023, FinCEN issued its final rule governing access and safeguarding BOI filed with FinCEN.  It goes into effect on February 20, 2024
  • FinCEN is authorized to disclose BOI under specific circumstances to:
    
    
    • U.S. federal agencies engaged in national security, intelligence, or law enforcement activity
    • U.S. state, local and tribal law enforcement agencies
    • Foreign law enforcement agencies, judges, prosecutors, central authorities and competent authorities
    • Financial institutions using BOI to facilitate compliance with BSA/AML and sanctions requirements under applicable law 
      
      
      • FinCEN has indicated it will stage access to its database based on the category of authorized recipients, and that financial institutions (and financial institution regulators) will be in the last stage.   
    • Federal functional regulators and other appropriate regulatory agencies acting in a supervisory capacity assessing financial institutions’ compliance with BSA/AML and sanctions requirements 
    • Treasury officers and employees
  • Considerations for financial institutions seeking BOI from FinCEN:
    
    
    • Consent of the Reporting Company/customer is required 
    • Must have security and information handling procedures that comply with Section 501 of the Gramm-Leach-Bliley Act and its implementing regulations
    • BOI may be obtained only to discharge a legal requirement or prohibition designed to counter money laundering or the financing of terrorism, or to safeguard the national security of the United States (e.g., current the CDD Rule, Customer Identification Program (CIP) requirements, suspicious activity reporting obligations and enhanced due diligence requirements)
      
      
      • Financial institutions may not obtain BOI from FinCEN for other ordinary business reasons
      • Financial institutions may not make blanket requests for BOI; they must be Reporting Company-specific
    • A financial institution will be ultimately responsible for the non-compliance of a third-party service provider that requests, obtains, or uses BOI from FinCEN on the financial institution’s behalf
    • Financial institution personnel may re-disclose BOI obtained from FinCEN to personnel of the same financial institution (not to include affiliates) if the re-disclosure is for the same purpose or activity for which it was originally requested, and re-disclosure is consistent with the security and confidentiality requirements of the Access Rule. 
      
      
      • BOI may not be sent to Russia, China, any jurisdiction designated as a state sponsor of terrorism, or any jurisdiction that is subject to comprehensive sanctions under U.S. law.
    • Financial institutions may re-disclose BOI obtained from FinCEN to:
      
      
      • Federal functional regulators, 
      • Certain self-regulatory organizations, and 
      • Other appropriate regulatory agencies (including state regulators) that (i) are authorized by law to determine the financial institution’s compliance with CDD requirements under applicable law; (ii) will use the information solely for making such determination; and (iii) has entered into an agreement with FinCEN providing for appropriate protocols governing the safekeeping of information.
• What are the Penalties for Unauthorized Use or Disclosure of BOI Obtained from FinCEN?
  • It is unlawful for a person to knowingly disclose or knowingly use BOI—regardless if the BOI was obtained directly or indirectly from FinCEN– except as authorized by the CTA and the Access Rule.
  • Civil Penalties: up to $500 each day a violation of continues or is not remedied
  • Criminal Penalties:
    
    
    • Up to a $250,000 fine or up to five years imprisonment, or both
    • Up to a $500,000 fine or up to ten years imprisonment, or both, if committed while violating another US law or as part of a pattern of any illegal activity involving more than $100,000 in a 12-month period.