The Corporate Transparency Act (CTA) was enacted in 2021 with the intention of preventing illicit activities like money laundering, terror financing, corruption, and tax fraud. As part of these reforms, certain entities are required to file beneficial ownership information (BOI) with the Financial Crimes Enforcement Network (FinCEN).
BOI reporting has now become an integral part of complying with federal regulations. Businesses can achieve compliance with the right balance between transparency and regulation. However, it is easy to lose sight of all the regulatory requirements and go astray. Understanding the primary requirements of BOI reporting and the different terminologies associated with it can be a steppingstone for companies beginning their compliance journey.
This blog will discuss the requirements of BOI reporting and ways to satisfy the federal requirements around BOI.
Who needs to file BOI?
This new CTA mandate requires many companies to report their beneficial ownership information to FinCEN. Reporting companies include corporations/LLCs registered with the secretary of state or any similar office under the law of a state or Indian tribe.
Who is exempt from BOI reporting?
There are 23 categories of entities that are exempt from BOI reporting, these include:
- Business entities, such as sole proprietorships, some general partnerships, foreign entities not registered to do business in the US, unincorporated associations, and wealth planning trusts
- Large operating companies
- Tax-exempt entities
- Entities related to utilities
- Entities related to securities and investments
- Entities related to regulations, tax and finance
- Entities related to insurance
Additionally, you can take this Tax1099 quiz to find out if your business qualifies as a Reporting Company: Tax1099 BOI Quiz
What are the BOI reporting requirements?
The BOI report must specify whether it is an initial report, correction of a prior report, or update to a prior report. The reporting company must provide the following details:
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Company Information
- Legal name of the company
- Trade name (DBA) used by the company
- Current street address of its principal place of business
- Taxpayer identification number
- An image of the identification document to FinCEN.
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Beneficial Owner Information
A beneficial owner is an individual who either directly or indirectly exercises substantial control over a reporting company or owns or controls at least 25% of a reporting company’s ownership interests. The beneficial owner’s details should include:
- Legal name
- Date of birth
- Residential address
- Unique identifying number
- Name of the state or jurisdiction that issued the acceptable identification document
- An image of the acceptable identification document.
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Company Applicant Information
A “company applicant” is the person who files paperwork to create a corporation, LLC, or similar entity with a state. Reporting companies created or registered on or after January 1, 2024, are required to report their company applicants. The company applicants’ details should include:
- Legal name
- Date of birth
- Complete current address
- Unique identifying number
- Name of the state or jurisdiction that issued the acceptable identification document
- An image of the acceptable identification document.
How to file BOI report?
Filing BOI can be surprisingly easy and quick. Tax1099 provides an effortless solution for filing BOI report.
- Go to Tax1099’s dashboard, select BOI Reporting, and click on Get Started.
- 2. Enter details of the Reporting Company
- 3. Fill in the Filing Information, Company Applicant, and Beneficial Owner details
- Review a Summary of the Application and Submit for Filing
Benefits of BOI Reporting with Tax1099
Here’s why you should choose to file your BOI report with Tax1099:
- Gather Beneficial Owner’s Information: Our platform allows you to quickly send a “request info” link to your beneficial owners via email, where they can share all the necessary details without having someone collect it manually. This also provides better data privacy for the individuals.
- Efficient Bulk Filing: Our fast and automated bulk importing process of Beneficial Owners’ data entry will save a considerable amount of your time and resources.
- Track Your Filing Status: Tax1099’s interface provides a collective view of all your filings at one place. You can easily track the status of each report, identify those in progress, or those successfully filed.
- Update or Correct Prior BOI Reports: You can also submit an update or corrections to prior reports through the Tax1099 platform.
- Record Keeping: When it comes to filing your records, it is necessary to keep them safe for future use. Tax1099 allows you to store and access all prior filings from one location for up to 3 years.
File your BOI with Tax1099- Designed for Fast and Accurate BOI Filings
