BOI filing for companies that reorganize their teams

Comprehensive research summary and guidance for BOI reporting when companies reorganize teams (US businesses) Summary of main findings - Source authorities: primary guidance comes from FinCEN (BOI FAQs and guidance), supplemented by law firm analyses and compliance advisories. FinCEN’s rule and FAQs are the controlling source for when initial, updated, and corrected BOI reports are required. - Key rule: Any change to required information previously reported about a reporting company or its beneficial owners must be reported to FinCEN through an updated BOI report no later than 30 calendar days after the date of the change. Corrected reports for inaccuracies must be filed within 30 days of learning of the inaccuracy. - Conversions and reorganizations: A corporate conversion or other change in entity type may in some state law contexts create a new “reporting company” and thus require an initial BOI filing by the new entity. Even where conversion does not create a new reporting company, a company must file an updated report if required reported facts have changed (e.g., legal name or jurisdiction of formation). - State registrations: Simply registering (filing to do business) in another state typically does not by itself trigger an updated BOI report; registration to do business is treated as authorizing an existing domestic/foreign reporting company to operate in a new state, and is not usually a trigger unless it changes required reported information. - Triggers to update BOI: examples FinCEN lists include changes to the reporting company’s legal name, jurisdiction of formation, changes in beneficial owners (including due to officer or board changes if those individuals meet the beneficial owner definitions), changes to a beneficial owner’s name/address/ID details, and resolution of litigation that changes who qualifies as a beneficial owner. - What must be filed: Updated BOI reports require submission of all required fields (the updated information plus the previously reported, unchanged information). If a new identifying document is used for a beneficial owner (e.g., new driver’s license), an image of the document must be included. - Timing: updated or corrected reports must be filed no later than 30 calendar days after the date of the change (or after becoming aware of an inaccuracy). Initial filing deadlines depend on the company’s creation/registration date and whether it was an existing company prior to 2024 (FinCEN provided transitional deadlines for pre-2024 companies). - Penalties: willful failure to file or willfully filing false BOI can lead to steep civil penalties (statutory per-day amounts adjusted for inflation; $591/day cited in guidance as an updated figure) and criminal penalties (up to 2 years imprisonment and fines up to $10,000), with potential safe-harbors for timely voluntary corrected filings in some circumstances. Practical guidance and compliance checklist for reorganizations and team changes 1) Map the reorganization changes - List every change that occurs in a reorg: corporate conversions, mergers, transfers of membership/stock, officer/CEO appointments or removals, board resignations/elections, changes in addresses, name changes, jurisdiction changes, and changes in who exercises substantial control. 2) Identify whether any change affects required BOI fields - Legal name of reporting company -> update required. - Jurisdiction of formation (if entity's formation jurisdiction changes) -> update required. - New or departing beneficial owners (persons with >=25% ownership or with substantial control) -> update required. - Change in company applicant information (only certain company-applicant changes are reportable) -> review FinCEN guidance. - New identifying documents or changes in name/address/ID for beneficial owners -> update required (include document images as needed). 3) Determine whether the reorganization creates a new reporting company - Check state statute: does conversion under the state’s law create a new domestic reporting company or treat the converted entity as the same legal entity? If state law creates a new reporting company, that new entity must file an initial BOI report. - If conversion does not create a new reporting company, still file an updated BOI report if any required information changed (e.g., new legal name or jurisdiction). 4) Timing and filing process - If an update is required, file an updated BOI report within 30 calendar days of the change. - For corrected reports (inaccuracies), file within 30 calendar days of learning of the inaccuracy. - Updated reports require resubmission of all required fields (not just the changed fields). Use the BOI e-Filing system or the FinCEN PDF procedure per FinCEN guidance. 5) Practical steps to operationalize compliance - Establish a reorg checklist that flags BOI-sensitive items (name, jurisdiction, ownership percentages, officers, addresses, ID documents). - Assign responsibility: designate an internal owner (e.g., general counsel, CFO) who will evaluate BOI impact and trigger filings. - Engage your third-party filer in advance if applicable; provide updates early enough to meet 30-day windows. - Keep contemporaneous records of dates of changes and filings (important for demonstrating compliance and for any safe-harbor considerations). - When in doubt, err on the side of filing an updated report promptly; FinCEN permits late submissions but penalties may apply for willful violations. 6) Examples / scenarios - CEO replacement: If the new CEO meets the definition of a beneficial owner (eg. exercises substantial control), file updated report within 30 days with new person’s details and ID image if required. - Member sale in an LLC: If a sale changes who owns >=25% or otherwise changes owners or persons exercising substantial control, file update within 30 days. - Corporate conversion (e.g., Inc. -> LLC): Check state law. If the conversion creates a new reporting company, the new entity must file an initial report. If not, file an updated report for any changed reported info (name, jurisdiction) within 30 days. - Registering to do business in a new state: Generally does not require an additional BOI filing solely because of registration, unless registration changes reported jurisdiction-of-formation or another reported field. Recommended next actions for businesses (US LLCs and corporations) - Conduct a quick BOI impact review whenever you plan or execute reorganizations, officer or board changes, equity transactions, or filings that might change the company’s legal name or jurisdiction. - Maintain a one-page BOI filing playbook for your company describing who assesses BOI impact, what documents are required, and timelines for filing. - Consult counsel or a compliance specialist for conversions and complex ownership structures (trusts, entities owning entities, contested ownership, or cross-border ownership). Reasoning / steps taken in the research 1) Per instructions, I performed targeted searches for FinCEN BOI guidance and authoritative commentary on how reorganizations, conversions, officer changes, and state registrations interact with BOI reporting obligations. 2) I used FinCEN’s BOI FAQs and related guidance as the primary source for rules on initial, updated, and corrected BOI reports and the 30-day timelines. 3) I cross-referenced litigation- and compliance-focused summaries from law firms and compliance advisory sites to extract practical examples and confirm FinCEN’s positions on conversions and state registrations. 4) Synthesized guidance into practical checklist items and common reorganization scenarios to make the guidance usable to US business owners and LLC founders. Citations with verbatim excerpts supporting the answer 1) FinCEN BOI FAQs — https://www.fincen.gov/boi-faqs Excerpts: - "If there is any change to the required information about your company or its beneficial owners in a beneficial ownership information report that your company filed, your company must file an updated report no later than 30 days after the date of the change." (H.1) - "Even if a conversion filing does not create a new domestic reporting company, a reporting company that undergoes such a conversion may nonetheless be required to submit an updated BOI report to FinCEN after the conversion. For example, if 'Company, Inc.' converted to an LLC, its name may have changed to 'Company, LLC,' and thus it may be required to file an updated BOI report because the name change is a change to required information previously submitted to FinCEN." (C.19) - "A reporting company does not need to file additional BOI reports in connection with subsequent filings with secretaries of state or similar offices that merely: (1) authorize a domestic reporting company that already exists under the laws of one State or Tribe to do business under the laws of another State or Tribe; or (2) authorize a foreign reporting company that is already registered under the laws of one State or Tribe to do business under the laws of another State or Tribe." (C.19) - "Updated BOI reports will require all fields to be submitted, including the updated pieces of information. For example, if a reporting company changes its legal name, the reporting company will need to file an updated BOI report to include the new legal name and the previously reported, unchanged information about the company, its beneficial owners..." (H.4) - "If a beneficial ownership information report is inaccurate, your company must correct it no later than 30 days after the date your company became aware of the inaccuracy or had reason to know of it." (I.1) - "As specified in the Corporate Transparency Act, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. However, this civil penalty amount is adjusted annually for inflation. As of the time of publication of this FAQ, this amount is $591. A person who willfully violates 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." (K.2) 2) Troutman Pepper summary of FinCEN updates — https://www.troutman.com/insights/fincen-updates-faqs-on-beneficial-information-reporting-requirements/ Excerpts: - "In the latest update, FinCEN has taken the position that a conversion of an entity from one corporate type to another, such as an LLC to a corporation, might create a new reporting company that must file a BOI report (BOIR) with FinCEN depending on the state law or the law of the Indian Tribe." - "A reporting company’s filing to do business in a new state does not in and of itself trigger a new BOIR or update requirement." - "Where the conversion creates a new domestic reporting company, that new reporting company is required to file an initial BOIR even if it is only in existence for a short time. Even if a conversion filing does not create a new domestic reporting company, a reporting company that undergoes such a conversion may nonetheless be required to submit an updated BOIR to FinCEN after the conversion if certain information has changed, such as its legal name or jurisdiction of formation." 3) HH Law supplemental guidance (summary blog) — https://hh-law.com/blogs/supplemental-hh-law-blogs/cta-corporate-transparency-act-fincen-beneficial-ownership-reporting/ Excerpts: - "Changes in your company or entity that might trigger a BOI Report amendment include, but are not limited to: 1) a name change of a beneficial owner; 2) death of a beneficial owner; 3) address changes of the company and/or beneficial owner; 4) a sale, recapitalization, redemption or reorganization of the company’s ownership interests; 5) elections or removal of officers; 6) board resignations and elections; or 7) creation or dissolution of board of director committees." - "The consequences for not complying with the BOI Reporting requirements are severe. Failure to file willfully, or filing false or fraudulent beneficial ownership information, may result in civil penalties of $591 per day or criminal penalties including imprisonment of up to two (2) years and a fine of $10,000." 4) Jones Day client alert (FinCEN clarifications) — https://www.jonesday.com/en/insights/2024/08/fincen-clarifies-application-of-beneficial-ownership-reporting-rules-to-dissolved-entities Excerpt: - "The Beneficial Ownership Information (BOI) Rule requires reporting companies that exist on or after January 1, 2024, to file a report even if they fully..." Notes and limits - FinCEN’s official BOI FAQs and Small Entity Compliance Guide are the controlling guidance for timing and content of BOI filings; state law will determine whether a conversion creates a new reporting company in the specific state. Businesses should consult state counsel or corporate counsel for entity-specific determinations about conversions. - This research focused on U.S. federal BOI/FinCEN guidance and reputable law-firm summaries. State-specific rules on entity conversions differ by state and should be checked for entity-specific conversion outcomes. If you would like, I can now: - Draft the full blog post aimed at US business owners/LLC founders (including an intro, detailed sections, checklist, scenarios, and a closing call to action), optimized for the provided slug and SEO keywords; or - Produce a short newsletter version and subject line tailored to the provided newsletter template; or - Produce a downloadable BOI reorganization checklist/one-page playbook you can give to clients.