BOI, or Beneficial Ownership Information Report, is a report that is required to be filed with the Financial Crimes Enforcement Network (FinCEN). This requirement was put in place in order to improve overall transparency and prevent fraud, money laundering, and other financial crimes from being conducted in the United States.
All companies that are eligible have to file the BOI report at the time of registering their business and make further updates when there are changes in the ownership information. Penalties, non-compliance issues, and regulatory enforcement are the possible outcomes of not filing the BOI report timely. All reporting companies have to understand the specific triggers of a changed BOI report so that the company does not face any unnecessary scrutiny.
When to Submit an Updated BOI Report?
Submitting after a Change of Structure, Ownership, or Beneficial Ownership
A BOI report is required each time a change in company structure, ownership, or changes to beneficial ownership occurs. In these circumstances, a reporting company must submit a report within 30 days of the change. Given below are the primary situations that require the company to submit a BOI report:
1. Changes in Reporting Company’s Information
If the reporting company modifies any of its previously reported details, an updated BOI report is necessary. This includes:
- Changing the legal name of the business.
- Registering a new trade name or doing business as a DBA name.
- Address of the business
For instance, if a company relocates to a different state or adopts a new business name for branding purposes, these changes should be reflected in the BOI report.
2. Changes in Beneficial Ownership
Beneficial ownership refers to individuals who own or control at least 25% of the company or exercise significant control over its operations. Certain modifications in ownership or control require an updated BOI report, including:
- The appointment of a new Chief Executive Officer (CEO) or other high-ranking officers with significant control over the company.
- A merger, acquisition, or sale that results in a change in ownership exceeding the 25% threshold.
- The resignation or departure of a beneficial owner.
Example: If a shareholder increases their stake beyond the 25% threshold, or if a majority shareholder sells their shares to another party, these ownership changes must be reported to FinCEN.
3. Changes in Current Beneficial Ownership’s Information
Companies are required to update FinCEN if any of the following changes occur regarding a previously reported beneficial owner:
- Legal name change (due to marriage, divorce, or other legal reasons).
- Address change (if the beneficial owner moves to a different residential location).
- New identifying document (such as obtaining a new passport, driver’s license, or other government-issued identification).
Example: Let’s say a beneficial owner legally changes their name and receives a new driver’s license. The reporting company should submit an updated BOI report along with an image of the revised document.
4. Minor Beneficial Owner Reaches Legal Adulthood
If a beneficial owner was initially reported as a minor, their legal guardian or parent’s information might have been used in the BOI report. However, once the individual reaches the legal age of adulthood, the company is required to update the details to keep the BOI reports accurate.
- Identify the individual (then minor) as a beneficial owner.
- Replace the parent or guardian’s information with their own.
Exceptions
While we talked about the scenarios where an updated BOI report needs to be filed, there are some exceptions. Let’s discuss them!
If there are changes to a company applicant’s information:
A reporting company does not need to update information regarding a company applicant (i.e., the individual who initially filed the BOI report).
If the company is terminated or dissolved:
If a company is permanently dissolved or terminated, there is no requirement to submit an updated BOI report.
How to Update a BOI Report?
If you are looking for a platform to update your BOI reports securely, Tax1099 is here for you! By leveraging Tax1099, an IRS-authorized eFile provider, for your BOI reporting needs, you can simplify the update process, ensure accuracy, and maintain compliance with regulatory requirements.
Step 1: Log into your Tax1099 account or sign up (if you are a new user). Go to the dashboard and select BOI Reporting. Select “Correct/Update Prior Report” from the drop-down.
Step 2: Enter the necessary updates for the beneficial owners and company applicants.
Step 3: Review the updated information for accuracy and submit the corrected report with the latest information.
