**Update: March 24, 2025: On March 21, 2025, FinCEN announced that domestic entities and their owners are now exempt from the BOI reporting rules. Foreign entities are still subject to the rules. Read the latest update here.
**Update: February 19th, 2025: After several changes, the injunction on BOI filing requirements has been lifted. A new deadline of March 21, 2025 has been issued directly from FinCEN. Read more here.
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Do You Need to File? | Reporting Exemptions | Reporting Requirements | Definitions | Important Filing Dates | How to File | Additional Resources | How We Can Help
Here at Plancorp we’ve developed a confluence of business owner clients who rely on us not only to manage things like their corporate retirement plans, but also to manage integrating the success of their business into their personal financial plan.
Our Financial Planning Committee recently developed a Business Owner’s Guide to the new Corporate Transparency Act. This article recaps our findings and recommendations.
In January 2021, The Corporate Transparency Act (CTA) was signed into law, expanding anti-money laundering laws and creating new reporting requirements for certain companies conducting business in the United States.
Beginning in 2024, many small businesses, including single-member limited liability companies (LLCs), are now required to submit beneficial ownership information reporting to the Financial Crimes Enforcement Network (FinCEN).
Using this reporting, FinCEN will build a national database for use by law enforcement agencies to prevent the use of shell companies for criminal activities.
Both domestic and foreign reporting companies are required to file these reports. A company is considered a reporting company if a document was filed with the Secretary of State (SOS) or similar office to register the entity.
Corporations (including S corporations), LLCs, and other entities formed through the SOS are subject to the reporting requirements as well.
However, if you own a sole proprietorship, a trust, or a general partnership, you will not be required to file as these types of businesses are general not considered reporting companies.
Foreign companies are required to file reports if they are registered with the SOS or similar office under state law.
Some companies are exempt from reporting, but many of the exempted companies are already required to report ownership information to a government authority through other laws.
As far as what business qualify for exemptions, if you own a large operating company, you are likely not required to file. A large operating company is any entity with:
If your business meets these qualifications, you are exempt from the new reporting requirements.
Beneficial ownership information (BOI) must be reported for the reporting company’s beneficial owners and, for entities formed or registered after 2023, company applicants.
BOI includes:
Two groups of individuals are considered beneficial owners of a reporting company:
Individuals with substantial control are those with substantial influence over important decisions about a reporting company’s business, finances, and structure.
Senior officers (president, CFO, general counsel, CEO, COO, and any other officer who performs a similar function) are automatically deemed to have substantial control, as are individuals with the authority to appoint or remove senior officers and board members.
There is no requirement that these individuals have actual ownership in the company to be considered a beneficial owner for reporting purposes.
For companies formed or registered after 2023, the company applicant is the person who actually files the document that creates or registers the reporting company (e.g., an attorney).
Company applicants must provide the same information that is required of beneficial owners. Because of the difficulty in tracking down information about company applicants for reporting companies that have been in existence for a number of years, reporting companies formed or registered before 2024 do not have to supply BOI for their company applicants.
Individuals and reporting companies can request a FinCEN Identifier (FinCEN ID) to use in place of supplying detailed information on the report.
A FinCEN ID is a unique number assigned by FinCEN which is obtained by submitting the same information as is required of a beneficial owner or reporting company.
A FinCEN ID may be useful to individuals that prefer to send their personal information directly to FinCEN rather than through a reporting company, or to individuals that may be required to supply information as a beneficial owner or company applicant of several reporting companies.
For existing reporting companies created or registered before 2024, the initial report is due by January 1, 2025.
For reporting companies created or registered in 2024, the initial report is due 90 days after the entity’s creation or registration.
For reporting companies created or registered after 2024, the initial report is due 30 days after the entity’s creation or registration.
If there is a change to previously reported information about the reporting company or its beneficial owners, an updated report must be filed within 30 days of the change. So, it’s imperative that your company implement a system to identify reportable changes and file an updated report in a timely manner.
The criminal penalties for willfully failing to meet both initial reporting obligations and filing changes to your initial BOI report are steep—$500 per day that the report is late, up to $10,000 and imprisonment for up to two years.
BOI reports must be filed electronically through FinCEN’s online filing system. Two methods are available for submitting a report:
Some third-party service providers may also offer the ability to file the BOI report through their software. The person who submits the BOI report will need to provide their name and email address to FinCEN. There is no fee for filing the report.
FinCEN’s website has additional information and several user-friendly resources available including a Small Entity Compliance Guide and an Frequently Asked Questions (FAQ) page to help guide businesses through the reporting requirements. You can access these resources at this link.
With a robust business solutions team and many advisors familiar with the unique needs of business owner clients, we’re here to help.
If you have any questions about these new reporting rules and how they affect your business, we’d be happy to discuss them with you and provide recommendations for additional assistance.
Reach out today to get in touch.