Does my company have to report its beneficial owners?
Not all companies are required to report BOI to FinCEN under the Reporting Rule. Companies are required to report only if they meet the Reporting Rule’s definition of a “reporting company” and do not qualify for an exemption. There are two categories:
- “Domestic Reporting Company”: A corporation, limited liability company (LLC) or any other entity created by filing a document with a secretary of state or any similar office under the law of an Indian State or Tribe.
- “Foreign reporting company”: A corporation, limited liability company (LLC), or other entity formed under the law of a foreign country that is registered to do business in any state of the United States or in any tribal jurisdiction by filing a document with a secretary of state or any similar office under the law of a State of the United States or Indian Tribe.
If your company is neither a “domestic reporting company” nor a “foreign reporting company” because it does not meet either definition or qualify for an exemption, it is not required to file a BOI report with FinCEN.
The Reporting Rule exempts twenty-three (23) specific types of entities from the reporting requirements listed below:
- 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
If a person has reason to believe that a report filed with FinCEN contains inaccurate information and voluntarily submits a report correcting the information within 90 days of the deadline for the original report, then the Corporate Transparency Act creates a safe harbor from penalties.
Willful failure to report complete and updated beneficial ownership information to FinCEN or attempting to provide false or fraudulent beneficial ownership information may result in a civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.