Hello there! If you’re navigating the world of US LLCs as a non-resident, you might have recently heard about a new requirement: the BOI Report. This update can seem a bit daunting, but don’t worry—Bizfyle is here to break it down for you in a way that’s easy to understand.
What is the BOI Report?
The BOI (Beneficial Ownership Information) report is a new compliance requirement designed to enhance transparency and combat financial crimes like money laundering and tax evasion. This report requires corporations, limited liability companies, and any other entities (other than exempt entities) to disclose detailed information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).
Why Is the BOI Report Important?
This new regulation aims to create a clear record of who truly owns and controls companies operating in the US. By collecting this information, the government can better track financial activities and prevent illegal activities. For you as a non-resident LLC owner, understanding and complying with this requirement is crucial to avoid penalties and ensure your business remains in good standing.
Who qualifies as a beneficial owner?
In the realm of reporting companies, a beneficial owner is someone who ultimately own or control the LLC, or has significant influence over the company, either directly or indirectly. Here’s how an individual can be identified as a beneficial owner:
a) They own or control at least 25% of the company’s equity or voting rights, which includes shares, options, or convertible instruments.
b) They hold substantial control over the company. This control can be demonstrated in a few ways:
- They hold a top executive position such as CEO, COO, or President.
- They have the power to appoint or remove key officers or a majority of the board of directors.
- They play a critical role in making major decisions regarding the company’s business, financial matters, or overall structure.
Understanding who qualifies as a beneficial owner helps ensure transparency and proper reporting for the company. There is no maximum number of beneficial owners who must be reported to FinCEN.
Who is a “Beneficial Owner”?
Any individual who directly or indirectly:
i) Exercises substantial control over a reporting company; OR
ii) Owns or controls at least 25 percent of the ownership interests of a reporting company.
There is no maximum number of beneficial owners who must be reported to FinCEN.
Deadlines for Filing the BOI Report: What You Need to Know
Filing the BOI report is crucial for keeping your US LLC in compliance with the latest regulations. Here’s a simple breakdown of the deadlines based on when your company was registered or formed:
1. For Companies Registered Before January 1, 2024:
If your LLC was set up before this date, you need to file the BOI report by January 1, 2025.
2. For Companies Registered On or After January 1, 2024:
Newer LLCs must submit the BOI report within 90 days of receiving their registration documents.
3. For Companies Registered On or After January 1, 2025:
If your LLC starts on or after this date, you’ll need to file the BOI report within 30 days of getting your registration papers.
What if you miss the deadline?
The BOI report is designed to ensure clear and transparent information about who owns and controls your company. Missing the deadline may be subject to civil penalties of up to $591 for each day that the violation continues. (This civil penalty amount is adjusted annually for inflation. Previously it was $500)
Wilful Non-compliance could lead to serious consequences, including fine up to $10,000 or even imprisonment for up to 24 months. Make sure to file on time to avoid these penalties and keep your LLC in good standing.
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How to File the BOI Report
Here’s a straightforward guide to help you through the filing process:
1. Gather Your Information:
Collect all necessary details about your LLC’s beneficial owners including:
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- Names, addresses, dates of birth, and identification numbers (such as passport numbers for non-residents)
- The legal name and principal business location of your LLC.
- Your Employer Identification Number (EIN) and the date of incorporation.
| Required Information | FinCEN Reporting | Non-Residents |
|---|---|---|
| Information About Beneficial Owners | ||
| Name | ✔ | ✔ |
| Date of birth | ✔ | ✔ |
| Address | ✔ | ✔ |
| Social security number (or similar number if non-U.S. person) | ❌ | ✔ |
| Unique identifying number and issuing jurisdiction from, and image of, one of the following non-expired documents: i) U.S. passport ii) State driver's license iii) Identification document issued by a State, local government, or Indian Tribe | ✔ | ❌ |
| Foreign passport | ❌ | ✔ |
| Information About Entities | ||
| Name | ✔ | ✔ |
| Any trade name or doing business as (DBA) name | ✔ | ✔ |
| Entity type | ❌ | ❌ |
| Address | ✔ | ✔ |
| Jurisdiction of formation and of registration (if foreign entity) | ✔ | ❌ |
| Tax identification number | ✔ | ✔ |
| Other Information and Certifications | ||
| Information about the company applicant(s) | ✔ | ✔ |
| Information about the individual opening the account: i) Name ii) Title | ❌ | ✔ |
| Certification by the individual filing the report with FinCEN: i) The report is true, correct, and complete. | ✔ | ✔ |
| Certification by the individual opening the account: i) To the best of the individual's knowledge, the information provided is complete and correct. | ❌ | ✔ |
2. Access the FinCEN Portal:
The BOI report must be filed through the FinCEN’s online portal. You can file either online or via a PDF form. While the online filing option is more convenient, you can still choose PDF method if you have Adobe Acrobat Reader installed on your computer.
3. Complete the Report:
Fill out the report with accurate and complete details about your LLC and its beneficial owners. The form consists of four parts: Filing, reporting company, beneficial owners, and company applicant. Double check the information to ensure accuracy.
4. Submit and Keep Records: Once the report is complete, validate your answers and submit it through the FinCEN portal. If there are errors like missing information, the system will flag them, allowing you to go back and fix them. After submission, keep a copy of a transcript of the BOI report for your records. This document may be required for future reference.
Tips to Avoid Common Mistakes When Filing the BOI Report
FinCEN’s Beneficial Ownership Information (BOI) Report requires detailed information about your company and its beneficial owners. Filing errors can lead to complications, so it’s crucial to get it right. So here are few tips you can use:
- Double-check details like names and addresses: Ensure all names and addresses are spelled correctly, as incorrect spelling might be considered inaccurate filing.
- Use a Physical Address as a business address: Do not use a P.O. Box as your business address. A physical street address is required.
- Prepare Digital Documents: Ensure all required documents are in the correct format and file size (under 5MB) to avoid upload errors.
- Consult a legal professional: Work with a legal expert to ensure you’ve identified all beneficial owners correctly. Their expertise can help you navigate the process smoothly and avoid oversights.
You can submit your BOI report with the help of a third-party service provider. With Bizfyle, you can file with confidence:
-
- Penalties are avoidable
- Peace of mind is possible
Updating the BOI
After the initial filing, a Beneficial Ownership Information Report must be updated if any of the information in it changes. Bizfyle can help you with ongoing BOI report update filings. You are required to report information changes to FinCEN within 30 days of the change. And in case, if have filed any inaccurate information in the report, you have 30 days to submit a corrected BOI form.
How can Bizfyle help you?
If you’re unsure whether you can rely on third-party services for BOI submission, Bizfyle is here to assist. Navigating this new requirement may feel overwhelming, and you might be concerned about the consequences of missing deadlines or submitting incorrect filings.
The good news is that Bizfyle can handle the BOI filing process for your reporting companies. All you need to do is provide the necessary documents and information, and we will take care of submitting the reports through FinCEN’s BOI E-Filing website. Upon submission, the BOI E-Filing system will generate an acknowledgment of success or failure, which we will share with you for your records.
Conclusion
Filing the BOI report is essential for maintaining transparency and trust in the business world, and it’s a crucial new requirement for US LLCs, including those owned by non-residents. While it may seem complex at first, breaking it down into manageable steps can simplify the process and ensure compliance. By staying updated on the 2024 requirements, you not only avoid the risks of non-compliance but also enhance your business’s credibility and integrity.
At Bizfyle, we’re dedicated to making the BOI filing process straightforward for you. Our expert team will guide you through every step, ensuring you stay compliant while you focus on growing your business. With Bizfyle by your side, you’ll navigate the complexities of BOI reporting with ease. If you have any questions or need further assistance, don’t hesitate to reach out. Here’s to smooth sailing with your LLC’s new filing requirements!
