BOI filing for companies in the transition of IP ownership

As of March 26, 2025, the Financial Crimes Enforcement Network (FinCEN) has significantly revised its Beneficial Ownership Information (BOI) reporting requirements under the Corporate Transparency Act (CTA).

This interim final rule (IFR) provides substantial relief for U.S. entities, exempting all entities created in the United States and their beneficial owners from BOI reporting. This means that for most U.S. business owners and LLC founders, the immediate burden of BOI reporting has been lifted.

However, foreign entities registered to do business in the U.S. are still subject to these rules, and understanding the implications, especially concerning intellectual property (IP) ownership transitions, remains crucial.

Under the revised definition, only foreign entities formed under the law of a foreign country that have registered to do business in any U.S. State or Tribal jurisdiction are considered 'reporting companies.' If your company is a foreign entity that meets this definition and does not qualify for other exemptions, you must still comply.

If your foreign entity registered to do business in the U.S. before March 26, 2025, the filing deadline was April 25, 2025. If your foreign entity registers to do business in the U.S. on or after March 26, 2025, you generally have 30 calendar days after receiving actual or public notice that your registration is effective to file an initial BOI report.

For foreign reporting companies, any change to the required BOI information about the company or its beneficial owners must be reported in an updated BOI report within 30 days of the change. This includes changes to beneficial owners, such as a sale that alters who meets the 25 percent ownership interest threshold.

If an IP sale or assignment materially changes who meets the beneficial ownership criteria (e.g., a different individual or entity now owns or controls at least 25% of ownership interests or exercises substantial control), an updated BOI report is required within 30 days.

If a reporting company transfers IP to a wholly-owned subsidiary and this does not change the beneficial owners, a BOI update is generally not required. However, if the transfer creates a new foreign entity that registers to do business in the U.S., that new entity may have its own initial BOI filing requirement.

IP licenses typically grant usage rights without transferring ownership. Therefore, a license alone usually won't trigger a BOI update unless it effectively alters control or economic ownership in a way that meets beneficial ownership definitions.

Any transfer that changes who exercises substantial control or holds 25% or more of ownership interests (directly or indirectly) will trigger an updated filing. Complex trust arrangements require careful analysis against FinCEN's definitions.

For foreign entities, navigating BOI reporting requires a structured approach:

As of March 26, 2025, the Financial Crimes Enforcement Network (FinCEN) has significantly revised its Beneficial Ownership Information (BOI) reporting requirements under the Corporate Transparency Act (CTA).

This interim final rule (IFR) provides substantial relief for U.S. entities, exempting all entities created in the United States and their beneficial owners from BOI reporting. This means that for most U.S. business owners and LLC founders, the immediate burden of BOI reporting has been lifted.

However, foreign entities registered to do business in the U.S. are still subject to these rules, and understanding the implications, especially concerning intellectual property (IP) ownership transitions, remains crucial.

Under the revised definition, only foreign entities formed under the law of a foreign country that have registered to do business in any U.S. State or Tribal jurisdiction are considered 'reporting companies.' If your company is a foreign entity that meets this definition and does not qualify for other exemptions, you must still comply.

If your foreign entity registered to do business in the U.S. before March 26, 2025, the filing deadline was April 25, 2025. If your foreign entity registers to do business in the U.S. on or after March 26, 2025, you generally have 30 calendar days after receiving actual or public notice that your registration is effective to file an initial BOI report.

For foreign reporting companies, any change to the required BOI information about the company or its beneficial owners must be reported in an updated BOI report within 30 days of the change. This includes changes to beneficial owners, such as a sale that alters who meets the 25 percent ownership interest threshold.

If an IP sale or assignment materially changes who meets the beneficial ownership criteria (e.g., a different individual or entity now owns or controls at least 25% of ownership interests or exercises substantial control), an updated BOI report is required within 30 days.

If a reporting company transfers IP to a wholly-owned subsidiary and this does not change the beneficial owners, a BOI update is generally not required. However, if the transfer creates a new foreign entity that registers to do business in the U.S., that new entity may have its own initial BOI filing requirement.

IP licenses typically grant usage rights without transferring ownership. Therefore, a license alone usually won't trigger a BOI update unless it effectively alters control or economic ownership in a way that meets beneficial ownership definitions.

Any transfer that changes who exercises substantial control or holds 25% or more of ownership interests (directly or indirectly) will trigger an updated filing. Complex trust arrangements require careful analysis against FinCEN's definitions.

For foreign entities, navigating BOI reporting requires a structured approach:

Determine Reporting Company Status

Confirm if your entity is a foreign reporting company under the current IFR.

Map Beneficial Owners

Identify individuals with 'substantial control' or 25%+ ownership. Document their name, DOB, address, and ID information (or FinCEN identifier). 3. Assess IP Transactions: For any IP transaction, evaluate if it changes beneficial owners, ownership percentages, or substantial control. If yes, prepare an updated BOI report within 30 days. If a new foreign entity is created and registered in the U.S., assess its initial filing obligations. 4. Confirm Effective Date: For new registrations, verify the 'effective date' from the secretary of state to determine filing deadlines.

Maintain Documentation

Keep records of IP transactions, ownership changes, board minutes, and registration notices.

Seek Professional Advice

If uncertain, consult legal counsel or a BOI-filing service. For foreign entities, the 'registration effective' date is critical for initial BOI filing deadlines. This date is the earlier of actual notice from a secretary of state or public notice in a registry. Practices vary by state, so confirm how each relevant state defines 'effective' and provides notice. Note that a reporting company does not need to file a separate BOI report each time it obtains authorization to do business in another U.S. state if it is already a reporting company. While domestic U.S. entities are currently exempt under the IFR, it's an interim rule subject to change. Foreign reporting companies should also be aware of other exemptions (e.g., large operating companies). If a company becomes newly exempt, it must file a 'newly exempt entity' BOI report. The primary risk for foreign reporting companies is non-compliance, leading to potential penalties. Given the evolving nature of these regulations, especially the interim status of the IFR, it is crucial to monitor official FinCEN guidance and consult with legal counsel for any transactions involving cross-border elements or complex IP structures.