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The Corporate Transparency Act requires nearly all businesses to file a Beneficial Ownership Information Report. Failure to file can result in criminal and civil penalties. File in 5 minutes with the fastest and most convenient filing service. Starts at $129.

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Beneficial Ownership Information

In recent years, the U.S. government has increased efforts to improve corporate transparency and combat illicit activities such as money laundering, fraud, and tax evasion. To counter these crimes, the U.S. government introduced the beneficial ownership information report (BOIR) as part of the Corporate Transparency Act (CTA).

This legislation requires companies to disclose key details about their beneficial owners, ensuring that ownership and control of business entities are transparent and traceable. By filing your BOIR with the Financial Crimes Enforcement Network (FinCEN), you help safeguard the integrity of the U.S. financial system.

Filing a BOIR may seem confusing, but the process is essential for maintaining compliance and avoiding severe penalties. FastFilings offers a convenient BOIR filing service to help businesses streamline this process, ensuring that your beneficial ownership information is reported accurately and efficiently.

With FastFilings, you have an ally that will walk you through the reporting process, so you can focus on running your business while ensuring you meet all legal obligations.

What Is Beneficial Ownership Information?

Beneficial ownership information refers to the details of individuals who, either directly or indirectly, own or control a company. These individuals, known as beneficial owners, are those who hold significant influence over a company’s operations or own at least 25% of the business. This can include major shareholders, key executives, or individuals with decision-making authority. Identifying these individuals is important for regulatory purposes, as it ensures transparency in business structures.

The collection of this information is mandated by the Beneficial Ownership Information Reporting Rule, which requires businesses to disclose their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). The rule aims to prevent criminals from using deceptive ownership structures, such as shell companies, to hide illegal activities. By ensuring that beneficial owners are publicly disclosed, the rule helps law enforcement and financial institutions monitor and fight fraud, money laundering, and other illicit financial practices.

Why Is Beneficial Ownership Information Important?

Beneficial ownership information plays a critical role in maintaining transparency within the corporate world. By identifying individuals who own or control a business, this data helps prevent the misuse of companies for illegal activities, such as money laundering, tax evasion, and terrorist financing. Knowing the identity of beneficial owners allows financial institutions and regulators to track potentially suspicious activities and take action where necessary, ensuring that businesses operate within the law.

The importance of beneficial ownership information reporting extends beyond regulatory compliance. It promotes trust within financial markets by demonstrating that businesses are operating transparently and ethically. On top of that, it supports global efforts to reduce corruption and illicit financial flows, thereby promoting a safer and more stable international business environment. By requiring companies to report their beneficial owners, authorities can more effectively protect the financial system from abuse.

What Is Beneficial Ownership Information Reporting?

Beneficial ownership information reporting is the process through which companies are required to disclose the individuals who own or control them. This mandate, enforced by FinCEN, is part of the Beneficial Ownership Information Reporting Rule introduced under the Corporate Transparency Act. The primary objective is to ensure transparency by identifying beneficial owners—who are, as previously stated, those who either own at least 25% of a business or have significant influence over its operations.

This reporting process is designed to prevent the misuse of corporate entities for illegal activities like money laundering, tax evasion, and fraud. Through beneficial ownership information reports (BOIR), FinCEN gathers and stores this data in a secure, non-public database. The information is accessible to authorized federal, state, and tribal officials for law enforcement and regulatory purposes, providing a vital tool to combat financial crimes and promote business transparency.

How to Complete the Beneficial Ownership Information Report in 3 Easy Steps

Here’s a simple process for sending in your BOIR:

(NOTE: FinCEN has been notified of recent fraudulent attempts to solicit information from individuals and entities subject to reporting requirements under the Corporate Transparency Act. The fraudulent correspondence may be titled “Important Compliance Notice” and asks the recipient to click on a URL or to scan a QR code. FinCEN does not send unsolicited requests. Do not respond to these fraudulent messages, click on any links, or scan any QR codes within them.)

What's the Corporate Transparency Act?

The Corporate Transparency Act (CTA), enacted in 2021, is designed to combat financial crimes by requiring businesses to disclose information about their beneficial owners. The act mandates that companies submit this information to FinCEN as part of a larger effort to enhance corporate transparency and prevent illegal activities.

The CTA is intended to prevent individuals from using anonymous shell companies to conceal their identities and conduct illicit activities. By collecting and storing this data, law enforcement agencies can better track and investigate suspicious activities. The CTA also establishes clear reporting deadlines and outlines penalties for failing to comply. This legislation is a cornerstone of the U.S. government’s efforts to protect the integrity of the financial system.

What Are the Penalties for Not Filing Your BOIR?

Failure to file your beneficial ownership information report (BOIR) on time or providing false information can result in serious penalties. These include:

Civil penalties: Fines of up to $500 per day for each day that the report is late or incomplete.
Criminal penalties: For willfully providing false information or failing to file, individuals may face fines up to $10,000 and imprisonment for up to two years.

Ensuring timely and accurate submission of your BOIR is essential to avoid these severe consequences. For companies that need help with these reports, FastFilings can be an invaluable resource, providing an easy-to-use online form that walks the user through the submission process.

Who's Exempt from Filing a BOIR?

While many companies are required to file a beneficial ownership information report (BOIR), there are specific types of entities that are exempt from this requirement. Generally, businesses that are already subject to strict reporting requirements or regulations, such as publicly traded companies, banks, and certain nonprofits, do not need to file. Furthermore, large operating companies that meet specific revenue and employee criteria may also be exempt.

These exemptions are designed to avoid duplicative reporting and streamline the process for businesses already under rigorous oversight. A list of organizational types that are exempt from BOIR requirements can be found in the FAQ section below.

BOIR FAQ

Q: When is the initial beneficial owner information report required to be filed with FinCEN for companies existing prior to January 1st, 2024?

Companies that existed before January 1, 2024, are required to file their initial beneficial ownership information report (BOIR) by January 1, 2025.

Q: When is the initial beneficial owner information report required to be filed with FinCEN for entities created on or after January 1, 2024, and before January 1, 2025?

Entities created or registered on or after January 1, 2024, and before January 1, 2025, must file their initial beneficial ownership information report (BOIR) within 90 calendar days after receiving actual or public notice that their creation or registration is effective. This ensures that newly established companies promptly report their beneficial ownership information.

Q: When is the initial beneficial owner information report required to be filed with FinCEN for entities created on or after January 1, 2025?

Entities created or registered on or after January 1, 2025, must file their initial beneficial ownership information report (BOIR) within 30 calendar days after receiving actual or public notice that their creation or registration is effective. This shorter deadline is intended to ensure timely reporting of beneficial ownership information for newly formed companies.

Q: What is a beneficial owner?

A beneficial owner of a business is an individual who directly or indirectly controls a company or owns at least 25% of its interests. Beneficial owners must be natural persons—i.e., individuals. Natural persons include people with decision-making power, such as major shareholders or senior officers.

Not all individuals connected to a company are considered beneficial owners. For instance, employees, consultants, or third-party service providers who perform work for the company but do not have control or ownership are not classified as beneficial owners. Furthermore, individuals with minimal ownership percentages or passive roles without decision-making power typically do not qualify. This distinction helps clarify the reporting process, ensuring that actual people who have substantial control over the company are identified.

Entities like trusts, corporations, or other legal structures cannot be considered beneficial owners. In some cases, however, if an entity holds ownership interests in the company, the entity’s information may be reported instead of the individual’s, depending on specific circumstances outlined by FinCEN.

Q: Which types of organizations are considered reporting companies?

Reporting companies include domestic corporations, limited liability companies (LLCs), and other legal entities that are formed by filing a document with a state or similar office in the U.S. Foreign entities registered to do business in the U.S. must also report, unless they qualify for an exemption.

Q: What is an example of a beneficial owner with substantial control?

An individual with substantial control over a company may be a senior officer (e.g., CEO, CFO), someone with the authority to appoint or remove directors, or an important decision-maker who directs key aspects of the company’s operations. For instance, a company president who controls major business decisions would be considered a beneficial owner with substantial control.

Q: Who must file a BOIR?

A beneficial ownership information report (BOIR) must be filed by the company itself or an authorized individual, such as an employee, owner, or third-party service provider. Companies are responsible for ensuring the information is submitted electronically through FinCEN’s reporting system.

Q: What types of companies are exempt from filing a BOIR?

Certain entities are exempt from filing a beneficial ownership information report, including publicly traded companies, government entities, banks, insurance companies, credit unions, large operating companies, and certain nonprofits. There are 23 types of exempt entities in total under the Corporate Transparency Act:

Securities reporting issuers (publicly traded companies)
Governmental authorities
Banks
Credit unions
Depository institution-holding companies
Money services businesses
Brokers or dealers in securities
Securities exchanges or clearing agencies
Other entities registered under the Exchange Act
Investment companies or investment advisers
Venture capital fund advisers
Insurance companies
State-licensed insurance producers
Commodity Exchange Act registered entities
Accounting firms
Public utilities
Financial market utilities
Pooled investment vehicles
Tax-exempt entities
Entities assisting tax-exempt entities
Large operating companies
Subsidiaries of exempt entities
Inactive entities

Q: What information is required for beneficial ownership?

The required information includes the beneficial owner’s full name, date of birth, residential address, and a unique identification number from an acceptable document such as a passport or driver’s license. A copy of the identification document must also be submitted.

Q: How do I file a BOIR?

The beneficial ownership information report (BOIR) can always be filed electronically through FinCEN’s secure system. However, for a more convenient and streamlined process, using FastFilings offers several advantages:

Simple Process: FastFilings handles all the complexities of BOIR submission for you.
Accurate Filing: Ensures that your report is compliant with FinCEN’s requirements, reducing the risk of errors.
Time-Saving: Avoids the time-consuming process of navigating FinCEN’s system on your own.
Expert Guidance: Benefit from professional support throughout the filing process.

About Us

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Our goal is to help you avoid the hassle and headache of preparing and filing government documents by yourself. We error check and rush all orders.