Effective January 1, 2024, the Corporate Transparency Act (CTA) will require most business entities to file an initial report with the Financial Crimes Enforcement Network (FinCEN) to disclose the entity’s beneficial owners. Entities that existed before January 1, 2024 have until January 1, 2025 to comply with the new law.
I previously wrote this article to cover general information about the new Beneficial Ownership Information (BOI) reporting requirements, including who is required to file.
I filed the initial BOI for my LLC recently and documented the process as I went through. I’ll walk through the steps I took below. The process was straightforward and only took about ten minutes to complete.
There are 23 total exemptions from having to file a BOI. Three of the most common are:
- Tax Exempt Entity. Any §501(c) entity exempt from tax under §501(a), any §527(e)(1) political organization exempt from tax under §527(a), and any trust described in §4947(a)(1) or §4947(a)(2). See 31 C.F.R. §1010.380(c)(2)(xix).
- Large Operating Companies. Any entity that employs more than 20 full-time employees in the United States, has an operating presence at a physical office in the United States, and filed a federal income tax return for the previous year showing more than $5 million in gross receipts or sales (net of returns and allowances). See 31 C.F.R. §1010.380(c)(2)(xxi).
- Inactive Entity. Any entity that was in existence on or before January 1, 2020; is not engaged in active business; is not owned by a foreign person, whether directly or indirectly, wholly or partially; has not experienced any change in ownership in the preceding twelve-month period; has not sent or received any funds in an amount greater than $1,000 in the preceding twelve-month period; and does not otherwise hold any kind or type of assets, whether in the United States or abroad. See 31 C.F.R. §1010.380(c)(2)(xxiii).
Since my LLC doesn’t fall under any of the exemptions, I’m required to file a report by January 1, 2025.
You will want to have a scanned copy of the beneficial owner(s) state issued driver’s license or passport available to upload before beginning the online filing process. I scanned a copy of my driver’s license and saved it as a PDF.
To file the BOI report, visit the BOI E-filing System. You will see two options (File PDF BOIR or File Online BOIR). I chose to file the Online BOIR, so this article will show that process.
There are five general sections of the BOI report that the online system will guide you through, beginning with “Filing Information”. I selected “Initial Report” and clicked “Next” at the bottom right.
Next, you’ll enter information for the reporting company. The reporting Company is the legal entity with the BOI filing requirement. A reporting company can request a FINCEN ID. This may be helpful for future filings or if you have more complicated legal structures. The reporting company can add a trade name or a “doing business as” (DBA) if applicable. Note that reporting company legal name is the only required field in the screenshot below indicated by the red asterisk.
Next, you’ll fill out the tax identification information. There is an option for social security number or federal EIN. The reporting company also lists the jurisdiction where the entity was formed along with the current U.S. address.
The third section is the disclosure of the reporting company’s company applicant(s). The company applicant is the individual or firm who formed the entity. This is not required for an entity that was already in existence prior to January 1, 2024. If that is the case, you can check box 16 (existing reporting company) and skip this section.
The fourth section requires you to disclose the reporting company’s beneficial owner(s). If you need to add more than one beneficial owner, click the “Add Beneficial Owner” blue box on the top right. If one owner has multiple companies creating multiple BOI filing requirements, consider obtaining a FINCEN ID for the owner. Once you have the FINCEN ID, you can enter the assigned FINCEN ID number instead of detailed owner information.
You will need to upload an identifying document for each beneficial owner (typically driver’s license or passport). Note in Box 49 below, I entered my driver’s license number and box 51 shows the name of the file I uploaded which contains a photo of my driver’s license.
The fifth and final step asks for email address and name of the person filing the form. There is a certification box that needs to be agreed to and checked by the person submitting the form.
After submitting the report, the final screen verifies the BOIR was submitted to FinCEN with a BOIR ID and Submission Tracking ID. If the reporting company requested a FinCEN ID, it is displayed on the final screen.
I saved a copy of this page and downloaded the transcript for my records.
