Under the Corporate Transparency Act (CTA) of 2021, all small companies, LLCs, and other corporations must file a Beneficial Ownership Information (BOI) report with FinCEN starting from January 1, 2024. When filing the BOI report, it is crucial for businesses to provide accurate and comprehensive information about their company, beneficial owner, and company applicant. Additionally, understanding the specific type of BOI filing required is essential for compliance. This article will delve into the various types of filings, the necessary information for each, and the deadlines for submission.
Different Types of BOI Reports
FinCEN has classified BOI reports into four distinct categories based on company requirements:
Initial Report
Updated Report
Corrected Report
Newly Exempt Entity Report
Let’s explore each type of report in detail:
Initial Report
Companies file an initial beneficial ownership information (BOI) Report for the first time. This report requires submitting fundamental information, including details about the company, its beneficial owners, and company applicants. Key information includes names, dates of birth, addresses, unique identification numbers, and images of acceptable identification documents.
Information Required for the Initial BOI Report:
Type of BOI Filing: Select the initial BOI report.
Reporting Company Details: Legal Name, Doing Business As (DBA) Names, current U.S. address, Tax ID number, and jurisdiction of formation or registration.
Company Applicant Details: Individual Name, date of birth, address, form of identification, issuing jurisdiction, and acceptable identification documents. (If the company applicant has a FinCEN ID, it should be provided in the BOI report instead of the above information.)
Beneficial Owner Details: Name, date of birth, residential address, form of identification, issuing jurisdiction, and acceptable identification documents.
Reporting Deadline(s) for the Initial BOI Report:
Formation Date of Reporting Company | Deadline for submitting the initial BOI report |
Before January 1, 2024 | Should submit before January 1, 2025 |
On or After January 1, 2024 | Should submit within 90 days from the effective date of registration |
On or After January 1, 2025 | Should submit within 30 days from the effective date of registration |
Updated Report
When a company needs to update the information previously reported to FinCEN about their company and beneficial owners, they must file an Updated Beneficial Ownership Information (BOI) Report. It’s important to note that a reporting company does not need to file an updated report for changes related to company applicants reported previously.
Information That Needs to Be Updated:
Changes in Reporting Company Information: Such as registering a new business name.
Changes in Beneficial Owner Details: Including their name, address, and unique identifying number previously submitted to FinCEN. For example, suppose a reporting company’s beneficial owner name or other identifying information has been changed, such as an address and driver’s license number. In that case, the company should file the updated beneficial ownership information report with FinCEN, including an image of the new acceptable identification document.
Changes in Beneficial Owners: For example, a new CEO or a sale that alters who meets the 25% ownership interest threshold. In the case of a beneficial owner's death, the company should update the changes regarding the beneficial owners within 30 days of the deceased beneficial owner’s estate being settled in the BOI report.
Special Rule:
It's important to remember the update requirement related to the special reporting rule for minor children.
If the beneficial owner is a minor, an updated BOI report must be filed when they reach the age of 18. This report should identify the individual as a beneficial owner and, if necessary, replace the parent's or legal guardian's information with their own.
Note: There is no requirement to report a company’s termination or dissolution.
Deadline:
The updated beneficial ownership information report must be filed within 30 calendar days of changes.
Corrected Report
If the information in a company's BOI report is found to be inaccurate, a Corrected Beneficial Ownership Information (BOI) Report must be filed. Corrections should be made within 30 days of becoming aware of the error or having reason to know about it. This applies to any incorrect information provided about the company, its beneficial owners, or company applicants.
Newly Exempt Entity Report
When a company has previously filed a BOI report with FinCEN but later qualifies for an exemption from filing, it should file an updated BOI report indicating that it is newly exempt from the BOI reporting requirements.
Updated BOI report requirements for the Newly Exempt Entity report will include the following:
Entity identifies itself.
Check a box noting its newly exempt status.
The Bottom Line
In conclusion, understanding the types of BOI filings, the required information, and the submission deadlines is crucial for compliance with the Corporate Transparency Act (CTA). To avoid hefty penalties, companies should ensure they submit accurate and complete Beneficial Ownership Information (BOI) reports. Here’s where TaxBandits becomes the real game changer!
Through TaxBandits, you can streamline your BOI reporting process and eliminate unnecessary manual data entry.
Additionally, TaxBandits enables you to invite beneficial owners to provide their information via a secure link. The report can be completed at both your pace and the beneficial owner's pace, as TaxBandits will automatically save your progress.
Let TaxBandits assist you in meeting your BOI filing requirements efficiently and effectively!
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