You may have heard rumblings about a new filing requirement for your company. And that it has some pretty stiff penalties if you don’t file on time. Please don’t fall for the scare-vertisements floating around on the inter-webs. Read on for a quick summary and action items presented in a friendly FAQ format.
For ALL of my clients, and most small businesses, this is a relatively painless process and I am here to help you navigate your questions and file well ahead of the EOY/90/30 day deadlines (see Q8 below).
For most businesses that do not utilize the complex structures that are the focus of the program, the filing process is actually quite easy so I have simplified the documentation provided on the FINCEN website so you can make sure your business is a “simple filer” and rest easy. I have also included links to the more in-depth discussion on the Dept of treasury website.
If you are NOT a Simple filer – then you will at least have the basic knowledge to hire someone to help you prepare a more complex filing or read the source reference materials in the links below.
I will be emailing ALL my clients who fall under the BOI requirements to let you know if/how you may personally be impacted.
Q1 – Who needs to file?
A1 – Simple answer = any business – not on the exempt list – that has filed as an LLC, Trust, Foundation, Partnership or Corporation with a US state’s Secretary of State must file.
Q2 – I work as an Independent Contractor and file a Schedule C. A few years ago I obtained an EIN when I had an employee, do I need to file?
A2 – If you have NOT formed your business as an LLC, then you do NOT need to file a BOI. Having an EIN, professional state issued license, or DBA filed with your state, does not oblige you to file a BOI – because they already know your company is just you source
Q3 – I own an LLC, but it is just me. Do I need to file?
A3 – Yep! And it is easy for you to do. The attached document shows the step-by-step filing. I did in less than 15 minutes (and I was doing the screen shots along the way). I estimate it will take you about 10.
Q4 – What do I need to report?
A4 – A list of individuals that are Beneficial Owners. These are the people – US or foreign citizens – that through their ownership interest directly or indirectly own 25% or more of the company OR exercises substantial control of the company. The list must contain their name, date of birth, address and an id number and image from a government issued ID
Q5 – I am part-owner of a Partnership. There are 6 of us an no-one has more that 20% ownership. Do I need to file?
A5 – Yes. And you will need to identify all of the Partners who have substantial control. Simply, any Partner who is an officer; can hire/fire an officer; or can execute or cancel contracts and business ventures is considered to have substantial control. Thus, all companies will have at least one or more Beneficial Owners. See Chapter 2.1 of the Small Entity Compliance Guide for more info.
Q6 – My LLC has two members that are also LLCs. Does that mean I don’t have to report on them?
A6 – NO. In fact, you need to either find out who the people are that own those LLCs, or obtain each Owner/LLC’s FINCEN ID. The FINCEN ID allows any LLC (Partnership etc) to create it’s own ownership bundle, that it can supply to your company (and other companies it has investments in).
Q7 – What happens if one of my partners sells their shares? Or moves?
A7 – Your company is responsible for keeping its BOI file up to date. If your partner has a FINCEN ID, then they should keep their address and contact info up to date. If they sell their shares, you should have the information on that sale (a common requirement in a company’s Article of Organization) and update your file. Of course, if the new partner is an LLC, ask for their FINEN ID to make life easier.
Q8 – What is the deadline for me to file?
A8 – Like many things related to your business – it depends. For companies formed:
- before Jan 1, 2024 – you have until the end of this year.
- in 2024, you have 90 days from the acceptance/verification date by the Secretary of State (SOS) of your filing.
- after 2024, then you have 30 days from the acceptance by the SOS.
Q9 – Barb, can you file for us?
A9 – In most cases yes. I am happy to manually file for you. If you are planning on growing (yippee!), you may want a 3rd party filer, that can better help you keep your records up to date automatically as you grow.
And lastly, because you know I always want to share the “Why”…
Q10 – What is the purpose of the Beneficial Ownership Information (BOI) reporting program?
A10 – The US Department of the Treasury has a division; FINCEN – or Financial Crimes Enforcement Network – that was formed to reduce financial crimes impacting US residents and businesses. These crimes include terrorist funding, human trafficking, money laundering and tax evasion. This mission has been complicated by criminals’ use of complex ownership of shell companies both domestic and foreign registered.
For most tax and other government reporting, the ownership is in company names and any one person can have small ownership of multiple companies that when added together are big pieces of the pie. Congress first introduced the “Corporate Transparency Act” in 2019 and it was signed into law in 2021 to provide the framework for FINCEN to collect and organize the needed data – rather than further burden the IRS and other departments away from their primary missions.
The resulting BOI database will be able to help quickly map and compute ownership of these interwoven entities, helping FINCEN and other law enforcement groups focus on the bad guys who have been known to abuse legitimate companies into their networks.
Other helpful or informative Links:
FINCEN Homepage – https://www.fincen.gov
Message from the Secretary of the treasury — https://www.youtube.com/watch?v=Xy7eZuTyfz8
BOI homepage — https://www.fincen.gov/boi
Filing Home page — https://boiefiling.fincen.gov
Village Accounting, LLC 
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