BOI reporting reminders for newly added beneficial owners

Understanding Beneficial Ownership Information (BOI) reporting is crucial for business owners, especially with recent regulatory changes. FinCEN's interim final rule (effective March 26, 2025) significantly revised the definition of a 'reporting company,' primarily focusing on foreign-formed entities registered to do business in the U.S. This means entities created in the United States and U.S. persons are now exempt from BOI reporting under the Corporate Transparency Act (CTA). Foreign entities already registered in the U.S. had a deadline of April 25, 2025, while new foreign registrants have 30 days after their effective registration notice to file.Key aspects of BOI reporting include: Update/Correction Timelines: Any change to reported company or beneficial owner information requires an updated BOI report within 30 days of the change. Inaccuracies must be corrected within 30 days of discovery. A 90-day safe harbor exists for voluntary corrections made within 90 days of the original report deadline. Required Information and Filing Method: Reports require company details (legal name, DBAs, principal office address, jurisdiction, TIN) and beneficial owner/company applicant information (full legal name, date of birth, current address, unique identifying number, and an image of a non-expired ID like a driver's license or passport). Filings are electronic via FinCEN's BOI E-Filing System (boiefiling.fincen.gov) and are free. Penalties and Enforcement: Willful failure to report or providing false information can lead to civil penalties of up to $500 per day and criminal penalties, including imprisonment up to two years and/or fines up to $10,000. FinCEN emphasizes compliance and offers a safe harbor for timely voluntary corrections. State-Level Interactions: Federal BOI requirements are separate from state-level formation and annual report obligations. State filings often require similar information but are typically public, unlike FinCEN's non-public BOI database. Businesses should review both FinCEN guidance and state Secretary of State (SOS) requirements, as some states (e.g., Washington, North Dakota) have updated their guidance to reflect FinCEN's IFR.Practical Guidance for Newly Added Beneficial Owners: 1. Confirm Applicability: Verify if your entity is a reporting company under the post-March 26, 2025 IFR. If it's a domestic U.S. company, it's likely exempt, but stay informed on regulatory updates and state obligations. If it's a foreign entity registered in the U.S. and not exempt, proceed with reporting. 2. Gather Required Information: Collect the new beneficial owner's full legal name, date of birth, current residential address, a unique identifying number, and an image of an acceptable, unexpired ID (U.S. driver's license, U.S. passport, state/tribal ID, or foreign passport if necessary). Ensure this is done promptly and securely. 3. Update FinCEN Identifiers (if applicable): If FinCEN identifiers are used, updates to an individual's information will propagate to linked BOI reports. Otherwise, prepare a new updated BOI report. 4. File an Updated BOI Report within 30 Days: The rule mandates filing updated reports no later than 30 days after the change occurred (or 30 days after becoming aware of an inaccuracy). Foreign reporting companies should confirm their specific filing window based on the IFR deadlines. 5. Use the BOI E-Filing System: Submit reports electronically at https://boiefiling.fincen.gov. There are no fees. Complete the BOIR form with all required company and beneficial owner fields, including ID images. 6. Recordkeeping and Policies: Maintain internal records of changes, supporting documents, and filed reports. Establish an internal process for beneficial owners to promptly notify the company of changes (e.g., name, address, ID updates) and train relevant personnel. 7. Coordinate with State Filings: Update state-level formation or annual reports separately if required by state law for changes in members, managers, or officers. This is distinct from FinCEN reporting. 8. Seek Professional Counsel: For complex situations like intricate ownership structures, trusts, pooled investment vehicles, or ambiguous control thresholds, consult corporate counsel or a compliance specialist.