FinCEN lists 23 types of exempt business entities that do not qualify as reporting companies under the reporting requirement.

• Securities reporting issuer
• Governmental authority
• Bank
• Credit union
• Depository institution holding company
• Money services business
• Broker or dealer in securities
• Securities exchange or clearing agency
• Other Exchange Act registered entity
• Investment company or investment adviser
• Venture capital fund adviser
• Insurance company
• State-licensed insurance producer
• Commodity Exchange Act registered entity
• Accounting firm
• Public utility
• Financial market utility
• Pooled investment vehicle
  Tax-exempt entity
• Entity assisting a tax-exempt entity
• Large operating company
• Subsidiary of certain exempt entities
• Inactive entity

The information required for beneficial ownership typically includes:

• Name: The full legal name of the beneficial owner.
• Date of birth: The birth date of the beneficial owner.
• Address: The residential address of the beneficial owner.
• Identifying number: A government-issued identification number, such as a driver’s license number or passport number.
• Issuer: The authority that issued the identification document.

Note: These requirements may vary slightly depending on the specific jurisdiction and the type of entity involved.

The Beneficial Ownership Information Reporting Rule is a federal regulation that requires certain entities to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). This rule is part of the Anti-Money Laundering Act of 2002 and is intended to help prevent money laundering and terrorist financing.

The rule also requires entities to report information about their legal representatives, such as officers, directors, and managers.

The Beneficial Ownership Information Reporting Rule is designed to help law enforcement agencies identify and investigate individuals who may be involved in money laundering or terrorist financing. By requiring entities to report information about their beneficial owners, the rule helps to prevent these crimes from occurring.

Entities required to file a Beneficial Ownership Information Report (BOIR) include corporations, limited liability companies (LLCs), partnerships, and trusts. These entities must provide detailed information about their beneficial owners, who are individuals with significant control over the entity, as well as their legal representatives, such as officers, directors, and managers.

The BOIR is essential for compliance with the Corporate Transparency Act and plays a critical role in preventing money laundering and terrorist financing by ensuring transparency about who controls and directs these entities.

An individual can exercise substantial control over a reporting company in four different ways.

If the individual falls into any of the categories below, the individual is exercising substantial control:

• The individual is a senior officer (the company’s president, chief financial officer, general counsel, chief executive office, chief operating officer, or any other officer who performs a similar function).
• The individual has authority to appoint or remove certain officers or a majority of directors (or similar body) of the reporting company.
• The individual is an important decision-maker for the reporting company.

Important decisions in the context of beneficial ownership typically refer to those that significantly impact the entity’s operations, finances, or direction. These can include:

• Financial decisions: Approving budgets, authorizing expenditures, making investment decisions, or determining dividend policies.
• Operational decisions: Hiring and firing key personnel, setting company policies, deciding on product or service offerings, and determining business strategies.
• Legal decisions: Making decisions about lawsuits, contracts, or regulatory compliance.
• Ownership decisions: Deciding on changes in ownership structure, such as issuing new shares or buying back existing ones.

Essentially, if an individual has the power to influence or make decisions that could substantially affect the entity’s success or failure, they are likely considered an important decision-maker and may be a beneficial owner.

A beneficial owner is an individual who directly or indirectly: (1) owns or controls at least 25% of your company’s ownership interests, or (2) exercises substantial control over your business.

Let our CPAs determine who the beneficial owners are for your company.

Your filing deadline depends on your company’s formation date, and we can assist in determining it. We’ll also keep you informed with notifications leading up to your filing deadline.

Generally, companies formed before January 1, 2024, have until January 1, 2025, to file. Entities formed between January 1, 2024 and January 1, 2025 must file within 90 calendar days from when they receive official or public notice of their formation.

Entities formed after January 1, 2025 must file within 30 calendar days from when they receive official or public notice of their formation.

Additionally, if any information on the report changes, the entity has 30 days to submit an updated report.

Meeting this requirement is crucial to avoid severe penalties, including up to two years of imprisonment, fines up to $10,000, and daily fines up to $591 for non-compliance.

Beneficial Ownership Information Reporting refers to the requirement for certain entities to disclose detailed information about the individuals who ultimately own or control them. This process is mandated by the Corporate Transparency Act and is designed to increase transparency and prevent illicit activities like money laundering and terrorist financing.