Business Ownership Information

  There are a few factors used in determining a beneficial owner, including an individual who, indirectly or directly:

• Exercises substantial control over a reporting      company
• Owns or controls 25% or more of a reporting      company’s ownership interests

There are, however, exemptions for certain entities. For example, large operating companies, public utilities, certain financial institutions, and insurance companies might be exempt if all criteria are met. In all, there are 23 exemptions, so your business should seek legal counsel to understand if you qualify as exempt.

 An individual can exercise substantial control over a reporting company in different ways. The individual exercises substantial controls if:  

• The individual is a senior officer of the company (president, chief financial officer, general counsel, chief executive officer, 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 or has some other form of substantial control over the reporting company. 

• A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025 to file its initial beneficial ownership information report.
• A reporting company created or registered on or after January 1, 2024, and before January 1, 2025, will have 90 calendar days after receiving notice of the company’s creation or registration to file its initial BOI report. This 90-calendar day deadline runs from the time the company receives actual notice that its creation or registration is effective, or after a secretary of state or similar office first provides public notice of its creation or registration, whichever is earlier.
• Reporting companies created or registered on or after January 1, 2025, will have 30 calendar days from actual or public notice that the company’s creation or registration is effective to file their initial BOI reports with FinCEN.

  A reporting company must report:

• Legal name
• Any trade names, DBAs, or trading as names
• Current street address of its principal place of business
• Its jurisdiction of formation or registration
• Taxpayer ID#

Beneficial owners must report:

• Individual’s name
• Date of birth
• Residential address
• A valid picture Identification issued by a government agency (i.e. passport, driver’s license)

• The penalties for non-compliant are significant. Willful violations could result in civil penalties and/or criminal penalties. FinCEN published inflation adjustments in January 2024 for civil monetary penalties, increasing the potential fine to $591 per day (effective Jan. 25, 2024) from its original $500. 
• A person who willfully violates any of the BOI reporting requirements may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000.  Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.

  Yes, but only in the case of any change in the Company’s Beneficial Owner information. There is no annual filing requirement, so the Reporting Company must remember to update its BOI Filing should any of the information change.