By Attorney Christina J. Adams, Hartmanlaw

So, I did a thing.  You know, one of those things that you know you have to do, you remind other people they also need to do, but you procrastinate taking care of it yourself? Even when it is something simple.  But finally, I did the thing! 

I reported the BOI of an LLC with FinCEN and you might need to do it, too.

If you are asking yourself “What the heck is she talking about? What is ‘BOI’?  What is ‘FinCEN’?”, let me give you the details so you can make sure you are in compliance with the CTA.  (I promise I’ll stop speaking in acronyms.)  Let’s start with the background.

In 2021, Congress passed the Corporate Transparency Act (the “CTA”).  In the CTA, Congress expressed concern that each year more than 2,000,000 corporations and limited liability companies (“LLCs”) or similar entities are formed in the U.S.  Most of those states, including Georgia, do not require that there be any record of who owns the company.  Bad actors have exploited this lack of transparency to launder money, fund terrorism, human and drug trafficking or other illegal activities.  In our business, we hear all the time about the risk of seller impersonation fraud and the lack of transparency regarding ownership of LLCs makes it that much easier to steal someone’s property.

In an effort to combat this problem, one of the requirements of the CTA is to report beneficial ownership information (“BOI”) to the Financial Crimes Enforcement Network (“FinCEN”).  In simple terms, an LLC or similar entity must now report who owns or controls the LLC or entity.  A beneficial owner must be a person, not another entity or company, including senior officers of the company. This information will not be available to the public, but will be available to certain government agencies and law enforcement agencies, as well as financial institutions.  This could assist lenders in their due diligence when making loans or opening bank accounts.  Closing attorneys will not have direct access to this information, but we (and the title insurance companies) may require that buyers or sellers provide a copy of their report to help combat seller impersonation fraud as well. If you buy and sell real estate with your LLC or Inc., the closing attorney will be required to collect BOI data at closing from the Seller and report it to FinCEN.

Let’s hit the highlights of what you need to know:

WHEN:  Your DEADLINE to file is January 1, 2025 for companies that were formed before 2024.  Or, if you set up a company in 2024, you had 90 days to file, (so hopefully you already knew about this requirement and timely filed).  If you set up a company after January 1, 2025, you will have 30 days from the date your company was registered to file your initial report. Some penalties for missing the deadline can run you $500 per day.

WHERE: Filing is done online at BOI E-Filing . Just select “File BOIR” and follow the steps.

WHAT:  You will need the following information about the Company to complete the report:

• The company’s full legal name
  • Any trade name or “DBA”
  • Current US address (can’t be a PO Box)
  • State where the company was formed
  • IRS taxpayer identification number (TIN) (also known as an Employer Identification Number or EIN) or Social Security Number if the company has a single member and reports under that person’s SSN
• You will also need information on each beneficial owner:
  • Full legal name
    • Date of birth
    • Complete current address
    • U.S. Passport number OR State-issued identification or driver’s license number
    • Image of the passport or state ID

WHO:  For our purposes, pretty much every LLC, corporation or any other entity formed by filing a document with the Secretary of State or similar office.  This doesn’t generally include trusts of the type used for estate planning or sole proprietorships that aren’t LLCs or corporations.  There are other exemptions as well, mainly for things like banks, insurance companies or large operating companies.  Homeowners associations must file unless they are recognized as a 501(c)(4) organization.  Even companies that you no longer use for business have to file unless you have filed for termination or the company has been dissolved for so long it cannot be reinstated. For persons who anticipate having to report BOI frequently or for multiple entities, consider obtaining an FinCEN ID Number for your convenience.

HOW OFTEN:  You need to update your filing if you have a change in beneficial owners (including to update the owner’s address) or convert your company from type to another (LLC converted to a corporation, for example).  You have 30 days to file the update. If you have questions, please go to https://www.fincen.gov/boi.  They have a pretty comprehensive list of FAQs and filing instructions available that should answer the most common questions.  There is also a “chat” feature which could be helpful as well.  Good luck!!!

We hope you enjoy this blog site and the valuable information from the Authors. Remember, this information should not be construed as tax planning advice or legal advice and no attorney-client relationship is expressed or implied. Please seek the advice of a professional to evaluate your own unique circumstances.