As part of our commitment to keeping you informed, we want to ensure you're aware of critical updates regarding important filing requirements for businesses. Staying compliant with these regulations is essential to avoid penalties and ensure your business remains in good standing.
While our firm does not directly manage Beneficial Ownership Information (BOI) filings, we are here to provide you with the necessary resources and information to help you comply with these important regulations.
The Corporate Transparency Act (CTA) requires all LLCs to comply with beneficial ownership information (BOI) reporting, effective as of January 1, 2024. If you own or manage an LLC, it's important to determine whether your company must file a Beneficial Ownership Information Report (BOIR) and, if so, to begin preparing for compliance.
Here are key questions and answers to guide LLC owners and managers:
What is a BOIR filing?
The CTA mandates the reporting of beneficial ownership information, which refers to details about individuals who own or control a company. This information is submitted to FinCEN via a BOIR filing.
Is my LLC required to file a BOIR?
Yes, unless your LLC qualifies for one of the 23 exemptions, it is required to file. Most exemptions apply to entities already subject to government regulation, such as public corporations, financial institutions, and nonprofits.
Is there an exemption based on the size of the LLC?
Yes. LLCs with more than 20 full-time employees in the U.S., a physical office presence in the U.S., and gross receipts over $5 million may be exempt.
What information is required in a BOIR filing?
The report must include details such as the LLC's legal name, trade names, principal business address, formation jurisdiction, and taxpayer identification number. For each beneficial owner, the LLC must report the individual's legal name, birthdate, home address, identifying number (e.g., driver's license or passport), and an image of the identification document.
Who is considered a beneficial owner?
A beneficial owner is any individual who directly or indirectly exercises substantial control over the LLC or owns at least 25% of its ownership interests. Every LLC will have at least one beneficial owner.
Who is not considered a beneficial owner?
Minors, intermediaries, employees acting solely in their employee capacity, creditors, and individuals with only a future interest through inheritance are not considered beneficial owners.
What is a company applicant?
For LLCs formed on or after January 1, 2024, a company applicant refers to the individual who files the formation document and anyone directing or controlling the filing.
When is my LLC's initial BOIR due?
LLCs created before January 1, 2024, must file by January 1, 2025. LLCs created after January 1, 2024, must file their initial report within 90 days of receiving notice of creation, and those formed after January 1, 2025, have 30 days to file.
How does my LLC file a BOIR?
BOIR filings are submitted electronically to FinCEN via their website. There is no filing fee, and a third-party service provider can assist with the submission.
What happens if my LLC's beneficial owners or information change?
Any changes to beneficial owners or previously reported information must be updated within 30 days by filing an updated BOIR with FinCEN.
Can an LLC amend its BOIR if it qualifies for an exemption or made a mistake?
Yes. If the LLC becomes exempt after filing or realizes there was a mistake in the initial report, it must file an updated or corrected BOIR within 30 days.
Can individuals submit their information directly to FinCEN instead of to the LLC?
Yes, individuals can apply for a FinCEN Identifier, which they can provide to the LLC in place of their personal information.
Will the public have access to BOI reports?
No, only authorized groups such as law enforcement, financial institutions (with consent), and certain regulatory agencies can access the information.
What are the penalties for non-compliance?
Violators may face civil penalties of up to $591 per day, criminal fines of up to $10,000, and imprisonment for up to two years.
How Brinker Simpson Can Help
Remember, while we do not facilitate BOI filings, we are here to keep you informed and provide valuable resources. Please contact our team if you have any questions or need assistance understanding these requirements.
Deadlines to Remember
Existing companies (as of January 1, 2024): File by January 1, 2025.
New companies (registered between January 1, 2024, and January 1, 2025): File within 90 days of formation.
New companies (registered after January 1, 2025): File within 30 days of formation.
