BOI reporting help for founders launching side entities

Key findings and summary (what a US founder launching side entities needs to know): - Current scope (Federal): As of the March 26, 2025 interim final rule, FinCEN removed the BOI reporting requirement for entities created in the United States (previously “domestic reporting companies”).

The revised regulatory definition of “reporting company” now generally covers only entities formed under a foreign country’s law that register to do business in a U.S. State or Tribal jurisdiction (i.e., certain foreign reporting companies).

Domestic U.S. entities are currently exempt from BOI reporting to FinCEN. (However, this is the regulatory landscape as of the cited FinCEN updates and could change; founders must monitor FinCEN and Treasury announcements.) - Deadlines (for entities that do need to report): For foreign reporting companies that must file, FinCEN set deadlines: entities registered to do business in the U.S. before March 26, 2025 must file by April 25, 2025; entities that register on or after March 26, 2025 generally have 30 calendar days after receiving notice that registration is effective to file an initial BOI report. (These deadlines apply only to entities that remain reporting companies under the updated rule.) - Who must report (general concepts preserved in guidance prior to the interim rule and still relevant for foreign reporting companies): reporting companies must identify themselves and report information about their beneficial owners (individuals) and, for companies created or registered on or after Jan 1, 2024, their company applicants (in some cases).

A beneficial owner is any individual who either (1) exercises "substantial control" over the company or (2) owns or controls at least 25% of the ownership interests. Company applicants are limited to the person who files the formation/registration document and the person primarily responsible for directing or controlling that filing (though there are limited timing rules about reporting company applicants). - What data is reported: BOI reports generally require identifying information for each beneficial owner: full legal name, date of birth, current address, and a unique identifying number and issuing jurisdiction from an acceptable identification document (plus an image of the ID).

Reporting companies must also identify themselves in the report. - Change reporting and corrections: Reporting companies must submit updated BOI reports when previously-reported information changes; FinCEN guidance addresses triggers for updates.

There is a limited safe harbor: voluntarily correcting an inaccurate report within 90 days of a deadline may help avoid penalties. - Enforcement and penalties: Willful failure to report, willfully providing false information, or willfully causing an entity not to file can lead to enforcement.

The CTA and FinCEN guidance reference civil penalties (up to $500 per day) and criminal penalties (up to two years imprisonment and/or fines up to $10,000) for willful violations; officers may be held accountable. - Practical effects for founders launching multiple side entities (U.S. domestic LLCs/corps): - Under the March 2025 interim final rule, most U.S.-created side entities are exempt from federal BOI reporting — founders of typical U.S.

LLCs/corps currently do not need to file BOI reports with FinCEN. Nevertheless, founders should: * Monitor federal rulemaking and FinCEN guidance for changes that might restore or change domestic reporting obligations. * Follow best-practice internal processes as if BOI data could be required: maintain accurate ownership records, KYC for owners, copies of IDs, cap tables, and formation documents; document who exercises substantial control; and keep timelines to enable fast reporting if rules change. * Remember that each reporting company (when required) must file its own report — a parent company cannot file a single report for a group. - If the founder forms or uses foreign entities that register to do business in the U.S., those foreign reporting companies may be required to file BOI reports (following the foreign-entity deadlines above).

Founders must treat such entities as potentially reportable and collect requested BOI information promptly. - Single-member LLCs / disregarded entities: Historically BOI guidance focused on reporting companies formed by filing with a secretary of state; single-member LLCs formed in the U.S. were treated as reporting companies unless exempt.

Under the March 2025 interim final rule, domestic single-member LLCs are exempt from federal BOI reporting. However, careful internal records should still be kept and owners should confirm state/local requirements. - Multi-entity ownership, trusts, nominees: Complex ownership (ownership via trusts or other legal entities) requires deeper analysis to identify the individuals who are beneficial owners (look through to natural persons who meet 25% or control thresholds).

If a parent entity is an exempt entity, special reporting rules may allow reporting the parent company name in lieu of BOI in narrow situations (per FinCEN guidance). Trustees, nominees, and trustees of trusts may create ambiguity — founders should obtain legal advice if ownership is not straightforward. - Practical compliance checklist for founders launching side entities (recommended actions): 1.

Determine whether the new entity is a reporting company under current FinCEN rules (as of March 26, 2025: most domestic entities are exempt; foreign entities registered in the U.S. may still be reportable).

Key findings and summary (what a US founder launching side entities needs to know): - Current scope (Federal): As of the March 26, 2025 interim final rule, FinCEN removed the BOI reporting requirement for entities created in the United States (previously “domestic reporting companies”).

The revised regulatory definition of “reporting company” now generally covers only entities formed under a foreign country’s law that register to do business in a U.S. State or Tribal jurisdiction (i.e., certain foreign reporting companies).

Domestic U.S. entities are currently exempt from BOI reporting to FinCEN. (However, this is the regulatory landscape as of the cited FinCEN updates and could change; founders must monitor FinCEN and Treasury announcements.) - Deadlines (for entities that do need to report): For foreign reporting companies that must file, FinCEN set deadlines: entities registered to do business in the U.S. before March 26, 2025 must file by April 25, 2025; entities that register on or after March 26, 2025 generally have 30 calendar days after receiving notice that registration is effective to file an initial BOI report. (These deadlines apply only to entities that remain reporting companies under the updated rule.) - Who must report (general concepts preserved in guidance prior to the interim rule and still relevant for foreign reporting companies): reporting companies must identify themselves and report information about their beneficial owners (individuals) and, for companies created or registered on or after Jan 1, 2024, their company applicants (in some cases).

A beneficial owner is any individual who either (1) exercises "substantial control" over the company or (2) owns or controls at least 25% of the ownership interests. Company applicants are limited to the person who files the formation/registration document and the person primarily responsible for directing or controlling that filing (though there are limited timing rules about reporting company applicants).

- Change reporting and corrections: Reporting companies must submit updated BOI reports when previously-reported information changes; FinCEN guidance addresses triggers for updates. There is a limited safe harbor: voluntarily correcting an inaccurate report within 90 days of a deadline may help avoid penalties. - Enforcement and penalties: Willful failure to report, willfully providing false information, or willfully causing an entity not to file can lead to enforcement.

The CTA and FinCEN guidance reference civil penalties (up to $500 per day) and criminal penalties (up to two years imprisonment and/or fines up to $10,000) for willful violations; officers may be held accountable.

- Under the March 2025 interim final rule, most U.S.-created side entities are exempt from federal BOI reporting — founders of typical U.S. LLCs/corps currently do not need to file BOI reports with FinCEN.

Nevertheless, founders should: * Monitor federal rulemaking and FinCEN guidance for changes that might restore or change domestic reporting obligations. * Follow best-practice internal processes as if BOI data could be required: maintain accurate ownership records, KYC for owners, copies of IDs, cap tables, and formation documents; document who exercises substantial control; and keep timelines to enable fast reporting if rules change. * Remember that each reporting company (when required) must file its own report — a parent company cannot file a single report for a group.

- Single-member LLCs / disregarded entities: Historically BOI guidance focused on reporting companies formed by filing with a secretary of state; single-member LLCs formed in the U.S. were treated as reporting companies unless exempt.

Under the March 2025 interim final rule, domestic single-member LLCs are exempt from federal BOI reporting. However, careful internal records should still be kept and owners should confirm state/local requirements. - Multi-entity ownership, trusts, nominees: Complex ownership (ownership via trusts or other legal entities) requires deeper analysis to identify the individuals who are beneficial owners (look through to natural persons who meet 25% or control thresholds).

If a parent entity is an exempt entity, special reporting rules may allow reporting the parent company name in lieu of BOI in narrow situations (per FinCEN guidance). Trustees, nominees, and trustees of trusts may create ambiguity — founders should obtain legal advice if ownership is not straightforward.

1. Determine whether the new entity is a reporting company under current FinCEN rules (as of March 26, 2025: most domestic entities are exempt; foreign entities registered in the U.S. may still be reportable).

• What data is reported: BOI reports generally require identifying information for each beneficial owner: full legal name, date of birth, current address, and a unique identifying number and issuing jurisdiction from an acceptable identification document (plus an image of the ID). Reporting companies must also identify themselves in the report.
• Practical effects for founders launching multiple side entities (U.S. domestic LLCs/corps):
• If the founder forms or uses foreign entities that register to do business in the U.S., those foreign reporting companies may be required to file BOI reports (following the foreign-entity deadlines above). Founders must treat such entities as potentially reportable and collect requested BOI information promptly.
• Practical compliance checklist for founders launching side entities (recommended actions):

Collect and securely store BOI data for all individuals who could be beneficial owners or company applicants

name, DOB, current address, ID number and issuing jurisdiction, and an image of the ID.

Maintain a clean cap table, operating agreement, and records evidencing who exercises substantial control.

Implement an owner-change tracking process (notify internal compliance when ownership or control changes).

If a reporting obligation appears possible (e.g., foreign entity registering in the U.S.), create a filing plan (who will file, deadlines, FinCEN ID or e-filing access, and retained evidence).

If you receive incomplete information from a beneficial owner, document attempts to obtain it; if not obtained, seek counsel about remediation.

Stay alert for FinCEN/Treasury updates and consider consulting a corporate attorney or compliance specialist for complex ownership structures.