BOI Report filing for your US LLC

Certain entities are required to disclose information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). Non-resident owners of U.S. businesses are required to disclose their identity and provide necessary documentation, including their passport number or other acceptable identifying information. This applies to both new and existing foreign-owned LLCs or corporations.

Key Provisions of the Corporate Transparency Act (CTA):

Definition of Beneficial Owner: The CTA focuses on the beneficial owners of companies, which are the individuals who ultimately own or control a company. This includes:

Any individual who, directly or indirectly, owns 25% or more of the company’s equity interests.

Any individual who exercises substantial control over the company, such as those who can influence or direct key decisions (even if they own less than 25%).

Who is Required to Report:

Domestic LLCs and Corporations: All U.S.-based limited liability companies (LLCs) and corporations that are created or registered to do business in the U.S. are required to report.

Foreign Entities: Foreign entities that are registered to do business in the U.S. (i.e., foreign LLCs or corporations doing business in the U.S.) must also comply.

Obligations Under the CTA:

Reporting Beneficial Owners: Entities must report to FinCEN the identity of their beneficial owners and certain information about them, including:

Full legal name

Date of birth

Residential or business address

A unique identifying number from an acceptable document (such as a passport or driver's license)

Reporting Changes: If there are changes in ownership (such as when a new beneficial owner is added or a current one exits), the company must update the information with FinCEN.

Deadline for Reporting:

Existing entities (as of January 2024) must file their beneficial owner information by January 1, 2025.

New entities formed after January 1, 2024, must file beneficial owner information within 30 days of formation or registration.

Exemptions:

The CTA does not apply to all entities. There are exemptions for certain types of businesses that are considered low-risk for financial crime. These include:

Large operating companies: Companies with more than 20 employees, more than $5 million in annual revenue, and a physical operating presence in the U.S.

Highly regulated entities: Certain regulated entities such as banks, credit unions, registered investment advisers, and large insurance companies are exempt from reporting under the CTA.

Inactive entities: Companies that are not conducting business and are essentially dormant may also be exempt.

Penalties for Non-Compliance:

Entities that fail to comply with the CTA’s reporting requirements or provide false or inaccurate information may face severe penalties, including:

Civil penalties: Up to $500 per day for failure to report or update information.

Criminal penalties: Fines of up to $10,000 and/or up to 2 years in prison for willfully providing false or misleading information.

Impact on Non-Residents: Non-resident individuals or foreign investors operating U.S. LLCs or corporations must comply with the CTA as long as their entities are registered to do business in the U.S. If a foreign person owns 25% or more of an LLC or exercises substantial control over it, they would be considered a beneficial owner and must be reported to FinCEN, just like U.S. residents.

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