BOI Report for LLC and Corporation: A Guide to Beneficial Ownership
Understanding the BOI Report for LLC and Corporation requirements is crucial for maintaining compliance with FinCEN regulations. A beneficial owner is defined as any individual who either directly or indirectly controls a company or holds significant ownership stakes. Here’s a breakdown of what you need to know about filing the BOI Report for your LLC or Corporation.
OwnWho is a Beneficial er in an LLC or Corporation?
A beneficial owner of an LLC or corporation is an individual who:
⦁ Exercises substantial control over the company, or
⦁ Owns or controls at least 25% of the company’s ownership interests.
Importantly, only individuals (not entities like trusts or other corporations) qualify as beneficial owners. However, in special situations, entities may be reported in lieu of individual owners when filing the BOI Report for LLC and Corporations.
What is Substantial Control in the BOI Report for LLC and Corporation?
Substantial control can be exercised in several ways. Individuals who meet any of these conditions should be listed in the BOI Report for LLC or Corporation:
⦁ Holding a senior officer position, such as CEO, CFO, or COO.
⦁ Having the authority to appoint or remove directors or key officers.
⦁ Being a major decision-maker within the company.
⦁ Exercising any other significant influence over company operations.
For further clarification on what constitutes substantial control, refer to FinCEN’s Small Entity Compliance Guide.
Exceptions to Beneficial Owner Reporting for LLCs and Corporations
There are a few exceptions when it comes to reporting beneficial owners. The BOI Report for LLC and Corporation allows exemptions for certain individuals who may otherwise qualify. These include individuals providing professional services (e.g., accountants, lawyers) who are not directly involved in the company’s decision-making processes.
Ownership Through Entities: Special Cases
When an individual’s ownership in an LLC or corporation is held through multiple exempt entities, the BOI Report for LLC and Corporation may allow the company to report the names of those entities instead of the individual’s personal information. This rule is applicable in very specific circumstances, particularly when ownership is entirely through exempt entities.
Handling Ownership Disputes in the BOI Report for LLC and Corporation
If ownership of an LLC or corporation is disputed and under litigation, the BOI Report for LLC and Corporation must still include the details of individuals who exercise control or claim ownership over 25% of the company. If the ownership dispute results in a change, an updated BOI report must be filed within 30 days.
Can Trusts Own LLCs and Corporations?
Yes, beneficial owners may own or control an LLC or corporation through a trust arrangement. If the ownership is held through a trust, individuals such as trustees or beneficiaries who exercise substantial control must be reported in the BOI Report for LLC and Corporation.
Compliance Tips for LLCs and Corporations Filing BOI Reports
To enReporting sure compliance when submitting your BOI Report for LLC and Corporation, it’s important to:
⦁ Accurately identify individuals who meet the criteria for beneficial ownership.
⦁ Review FinCEN’s Small Entity Compliance Guide for specific reporting rules.
⦁ Keep an eye on reporting deadlines to avoid penalties.