How do you know your business is a “reporting company” required to file reports?

Any U.S. and foreign business entity that does not qualify for an exemption is required to file a Beneficial Ownership Information Report (BOIR). The Act exempts 23 specific types of entities, including banks, insurance companies, and other financial businesses, which are generally already subject to some other form of Federal government oversight - a full list and guide to these exemptions can be found here.

What information must be reported?

Company Information

Once it is determined that your business is a required reporting company, you must report certain basic information about the company, such as its legal name, any trade names, its principal business address, jurisdiction of formation, and EIN.

Beneficial Owner Information

You must also identify the beneficial owners. A beneficial owner is any individual who has substantial control over the business or owns or controls at least 25 percent of the business’ ownership interests. According to FinCEN, ownership interests include equity, stock, convertible instruments, profit interests, or any other type of instrument, contract, or mechanism used to establish ownership. There are five exceptions that may apply to individuals who might otherwise qualify as beneficial owners, including minor children, custodians, employees, inheritors, and creditors.

Company Applicant

Reporting companies formed after January 1, 2024 are also required to report the individuals doing the physical filing but also those directing the individual that is physically filing the BOIR. A reporting company will have at least one company applicant, and at most two.

How can you prepare?

Before you file, have the following handy:

Reporting Company:

• Full legal name
• All “doing business as” (DBA) names
• Current U.S. address for its principal place of business

Jurisdiction of formation

• IRS Taxpayer Identification Number (TIN) (including an Employer Identification Number (EIN))

Beneficial Owner and Company Applicant:

• Full legal name
• Date of Birth
• Complete current address (Beneficial Owner – residential address; Company Applicant with no ownership – the business address)
• Unique identifying number and issuing jurisdiction from, and image of, U.S. passport, State driver’s license, or state identification.

How to file?

Reporting companies may look to companies providing filing assistance; however, FinCEN does provide instructional resources which can be found here.

Penalties for non-compliance

Penalties are severe and can be imposed on senior officers and beneficial owners themselves. The penalties including fines for willful non-compliance of up to $500/day and/or criminal confinement for up to two years.