FinCEN Provides Guidance for Small Businesses on Filing Beneficial Ownership Reports
FinCEN provided guidance for small businesses on filing Beneficial Ownership Information ("BOI") reports.
The guidance follows the adoption of reporting requirements under the Corporate Transparency Act. Pursuant to those requirements, corporations, limited liability companies and other entities created in or registered to do business in the United States must identify the beneficial owners of the reporting company and each "company applicant" (see previous coverage). In the guidance, FinCEN said that reports must be filed electronically beginning on January 1, 2024, when the BOI reporting regulations take effect. FinCEN clarified that:
- a "reporting company" required to file a BOI report is a company that meets the definition of "domestic reporting company" or a "foreign reporting company" and has not qualified for an exemption from filing a report;
- a "beneficial owner" is any individual who (i) exercises "substantial control" over a reporting company or (ii) owns at least 25 percent of a reporting company's ownership interests;
- companies will have 90 days following the reporting deadline to make corrections should they have reason to believe that their BOI reports contain inaccurate information;
- a company must report its company applicants if the company is a domestic reporting company that was created on or after January 1, 2024 or is a foreign reporting company that registered to conduct business in the United States on or after January 1, 2024; and
- information on a company must be collected in accordance with FinCEN’s Reporting Rule.