FinCEN BOI Report Instructions
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Step by Step Instructions to Report BOI
Updated on March 25, 2024 - 10:30 AM by Admin, TaxBandits
In 2021, Congress passed the bipartisan Corporate Transparency Act to curb illicit finance. This Act mandates certain types of U.S. businesses to submit beneficial ownership information—detailing who ultimately owns or controls them—to the Financial Crimes Enforcement Network (FinCEN), an agency of the United States Department of the Treasury.
The objective of the BOI Reporting Rule is to prevent illegal activities such as money laundering, tax evasion, terrorist financing, and other endeavors that might disguise themselves as legitimate small businesses.
This article provides step-by-step instructions for completing the BOI report for your company.
Table of Contents:
1. Who is required to submit BOI Reporting?
Typically, companies that are required to report are called "Reporting Companies." Your company may need to report information about its beneficial owners if it is a:
- Corporation, Limited Liability Company (LLC), or otherwise created in the United States by filing with a secretary of state or any equivalent office. (OR)
- Foreign Company registered to do business by filing in any U.S. state or similar office of a state or Tribe.
However, there are 23 types of entities that are exempt from beneficial ownership information reporting requirements, including publicly traded companies, nonprofits, and certain large operating companies.
2. What information is included in the Beneficial Ownership Information(BOI) report?
Whether you own a small business or a large corporation, it's crucial to comprehend the regulations surrounding BOI reporting. A Beneficial Ownership Information (BOI) report comprises four essential elements, including:
Here’s a breakdown of each section:
The Reporting Type
To begin filing the BOIR, the reporting company must choose the type of report they are filing. The different types of filings include:
A. Initial report
This is the filing type a reporting company should select if they are filing their first BOIR.
B. Correct prior report
A reporting company can choose this filing type if they need to update incorrect information on a previously filed BOIR.
C. Update prior report
A reporting company can choose this type of filing if the (correct) information reported on the previous BOIR has changed. For example, if a new beneficial owner is added, an updated BOI Report should be filed.
D. Newly exempt entity
In this filing category, the reporting company was initially obligated to furnish specific details in BOI reports but has since become exempt from those reporting requirements. In such instances, the company is required to submit the report under the designation "newly exempt entity BOIR" (Beneficial Ownership Information Report).
The Reporting Company:
As mentioned earlier, reporting companies include those formed in the U.S. or foreign entities registered to conduct business in the U.S. by filing with a secretary of state or equivalent office.
How does a reporting company complete an Initial BOI Report?
When a reporting company files the BOI for the first time with FinCen, then the following information is provided in the Initial BOI report:
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Name - Provide the company's full legal name, including any trade or "Doing Business As" names.
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Address - Supply the complete current U.S. address, representing the principal place of business.
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TIN - Specify the company's Tax ID type (EIN, SSN, or a foreign tax ID) and provide the Tax Identification Number. If a foreign tax ID is used, mention the Country/Jurisdiction.
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FinCEN Identifier (FinCEN ID) Request - During BOI filing, the reporting company has the option to request a unique FinCEN Identifier. The FinCEN ID will be provided to the filer after the BOIR is accepted.
What is the FinCen identifier?
A "FinCEN identifier" is a unique 12-digit number assigned by FinCEN to an individual or reporting company upon request, provided they furnish specific information. Reporting companies can subsequently utilize this ID when filing corrections or updates, streamlining the process without requiring the submission of their complete details on the BOIR.
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Foreign Pooled Investment Vehicle - If the reporting company is a foreign pooled investment vehicle, it is required to report only one beneficial owner with substantial control over the company. In cases where multiple individuals hold substantial control, the company should furnish details about the individual with the highest authority in managing the entity's strategies. Importantly, the report should abstain from including any information about company applicants
Define-Foreign Pooled Investment Vehicle
Suppose an entity meets the criteria of Exemption #18 (pooled investment vehicle exemption ) and is formed under the laws of a foreign country. In that case, the entity is subject to a separate reporting requirement. These companies are referred to as “foreign pooled investment vehicles” in the
Reporting Rule.
The Company Applicants:
A reporting company, required to disclose company applicants to FinCEN, must identify and report at least one and at most two company applicants. It's crucial to note that corporations or legal entities reporting BOI to FinCEN cannot be considered company applicants.
Additionally, reporting companies have the option to provide FinCEN Identifiers for a company applicant, replacing the need for the following information: Legal name, Date of Birth, Current address, Form of identification, and issuing jurisdiction.
The following information is required from a company applicant:
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Name and Date of birth - Provide the Full legal name and Date of Birth of the company’s applicant
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Address Type - Specify whether the address is for business or home by choosing "Business address" or "Residential address" for the company applicant. If the company applicant, like a legal assistant, is setting up or registering an entity as part of their work, provide the street address of that business. Otherwise, for individuals in different situations, report their residential street address.
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Address - Provide the company applicant’s U.S. address information, including the city, country or jurisdiction, State, and ZIP code or foreign postal code.
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Form identification and issuing jurisdiction - Provide the unique identifying number and issuing jurisdiction from one of the following non-expired documents:
- A U.S. passport
- An identification document issued by a State, local government, or Indian Tribe issued to identify the individual
- State-issued driver’s license
- A foreign passport is required if the above-mentioned identification documents (1 to 3) are unavailable.
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Identifying document image - Attach an image of an acceptable identification document for the company applicant. The following are the guidelines for the identifying document image:
- The image of the identifying document must be clear and readable, containing the unique identifying number and other identifying data.
- The supported formats of the document image are JPG/JPEG, PNG, and PDF.
- Maximum file size: 4MB
Note: A foreign passport is only acceptable if the individual does not have one of the other identifying documents, which includes a State-issued driver’s license, State/local/Tribe-issued ID, or U.S. passport.
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After providing the required information about the reporting company's #1 company applicant, you can add information about the #2 company applicant because reporting companies can report up to 2 company applicants.
The Beneficial Owners:
A beneficial owner is any individual who, directly or indirectly,
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Exercise substantial control over a reporting company. This could include senior officers, board members, or others who have substantial control or influence over company decisions.
(OR)
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Owns or controls at least 25% of the ownership interests of a reporting company. Ownership interests include stock, equity, voting rights, capital or profit interest, convertible instruments, options or privileges, or other instruments or arrangements used to establish ownership.
A beneficial owner requires the following information to be reported:
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Parent/Guardian information instead of a minor child - If the beneficial owner for the reporting company is a minor child, then you must provide information about the minor child's parent or legal guardian.
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Beneficial owner FinCEN ID - A Reporting Company can provide a FinCEN Identifier for a beneficial owner. If a FinCEN ID is not provided, all necessary information regarding the beneficial owner must be provided.
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Exempt Entity - If the beneficial owner holds ownership interest in the reporting company through one or more exempt entities, then the name of that exempt entity or entities is reported instead of the beneficial owner’s information. In this case, provide the legal name of the exempt entity.
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Individual’s last name or entity’s legal name - Enter the exempt entity's or beneficial owner's legal last name. Do not abbreviate names unless an abbreviation is part of the legal name.
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Name and Date of Birth - Provide the beneficial owner's Legal name, Date of birth, and Residential address.
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Form identification and issuing jurisdiction - Provide the unique identifying number and issuing jurisdiction from one of the following non-expired documents:
- A U.S. passport
- An identification document issued by a State, local government, or Indian Tribe issued to identify the individual
- State-issued driver’s license
- A foreign passport is required if the above-mentioned identification documents (1 to 3) are unavailable.
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Identifying document image: - Attach an image of an acceptable identification document for the company applicant. The following are the guidelines for the identifying document image:
- The image of the identifying document must be clear and readable, containing the unique identifying number and other identifying data.
- The supported formats of the document image are JPG/JPEG, PNG, and PDF.
- Maximum file size: 4MB
Note: A foreign passport is only acceptable if the individual does not have one of the other identifying documents, which includes a State-issued driver’s license, State/local/Tribe-issued ID, or U.S. passport.
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After providing the required information about the reporting company's #1 company applicant, you can add information about the #2 company applicant because reporting companies can report up to 2 company applicants.
3. When is the deadline to submit BOI Reports?
FinCEN started accepting BOI Reports on January 1, 2024. The following information can be used to determine a company’s deadline to report BOI to FinCEN:
- If your company was created or registered before January 1, 2024, you will have until January 1, 2025, to report BOI.
- If your company is created or registered in 2024, you must report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.
- If your company is created or registered on or after January 1, 2025, you must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
4. Your Company’s BOI Reporting is Easier with TaxBandits!
Filing out the FINCEN BOI report is a mandatory process that requires attention to detail and accuracy. The instructions outlined in this guide are designed to help you navigate the process smoothly. Remember, this report is a one-time requirement, but updates are necessary if your business undergoes significant changes.
Compliance with the federal Corporate Transparency Act (CTA) is mandatory. The BOI reporting requirement affects millions of small business owners and others. If they don’t comply, they risk harsh civil and criminal penalties, including hefty fines and possible time behind bars.
File your BOI report efficiently with TaxBandits—an easy-to-use platform that simplifies the reporting process effortlessly. By streamlining procedures and ensuring seamless compliance, TaxBandits allows you to focus on what matters most: the success of your business.
Trust TaxBandits to make your reporting journey smoother and more efficient!