BOI support for founders unfamiliar with U.S. regulations

Recent updates to the Corporate Transparency Act (CTA) have significantly altered Beneficial Ownership Information (BOI) reporting obligations. FinCEN has issued an interim final rule exempting all domestic reporting companies and their beneficial owners from the requirement to file initial BOI reports, or to update or correct previously filed BOI reports.

This means U.S. companies and U.S. persons are no longer required to report BOI to FinCEN. However, foreign entities that meet the definition of a 'reporting company' and do not qualify for an exemption must still report their BOI.

This includes foreign pooled investment vehicles, which must report the BOI of any non-U.S. person exercising substantial control. An exception exists for foreign reporting companies entirely owned and controlled by U.S. citizens, which do not need to comply.

For foreign reporting companies, specific deadlines apply: Entities registered before March 26, 2025, must file their initial BOI report by April 25, 2025. Entities registered on or after March 26, 2025, have 30 calendar days to file their initial report after receiving notice of effective registration.

Not all companies are required to report; only those that meet the Reporting Rule's definition of a 'reporting company' and do not qualify for an exemption. A beneficial owner is defined as an individual who directly or indirectly exercises substantial control over a reporting company or owns or controls at least 25 percent of its ownership interests.

Reports must include information about the entity itself and be certified as true, correct, and complete. A safe harbor from penalties is available if inaccurate information is voluntarily corrected within 90 days of the original report's deadline.

Recent updates to the Corporate Transparency Act (CTA) have significantly altered Beneficial Ownership Information (BOI) reporting obligations. FinCEN has issued an interim final rule exempting all domestic reporting companies and their beneficial owners from the requirement to file initial BOI reports, or to update or correct previously filed BOI reports.

This means U.S. companies and U.S. persons are no longer required to report BOI to FinCEN. However, foreign entities that meet the definition of a 'reporting company' and do not qualify for an exemption must still report their BOI.

This includes foreign pooled investment vehicles, which must report the BOI of any non-U.S. person exercising substantial control. An exception exists for foreign reporting companies entirely owned and controlled by U.S. citizens, which do not need to comply.

For foreign reporting companies, specific deadlines apply: Entities registered before March 26, 2025, must file their initial BOI report by April 25, 2025. Entities registered on or after March 26, 2025, have 30 calendar days to file their initial report after receiving notice of effective registration.

Not all companies are required to report; only those that meet the Reporting Rule's definition of a 'reporting company' and do not qualify for an exemption. A beneficial owner is defined as an individual who directly or indirectly exercises substantial control over a reporting company or owns or controls at least 25 percent of its ownership interests.

Reports must include information about the entity itself and be certified as true, correct, and complete. A safe harbor from penalties is available if inaccurate information is voluntarily corrected within 90 days of the original report's deadline.