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Beneficial Owners

What If Beneficial Owner Refuses to Give Information?

Question:  What should a reporting company do if a beneficial owner or company applicant withholds information?

Answer: While FinCEN recognizes that much of the information required to be reported about beneficial owners and company applicants will be provided to reporting companies by those individuals, reporting companies are responsible for ensuring that they submit complete and accurate beneficial ownership information to FinCEN. Starting January 1, 2024, reporting companies will have a legal requirement to report beneficial ownership information to FinCEN.

Existing reporting companies should engage with [. . .]

Who Can Be Liable for Violating BOI Reporting Requirements?

Question: Who can be held liable for violating BOI reporting requirements?

Answer: Both individuals and corporate entities can be held liable for willful violations. This can include not only an individual who actually files (or attempts to file) false information with FinCEN, but also anyone who willfully provides the filer with false information to report. Both individuals and corporate entities may also be liable for willfully failing to report complete or updated beneficial ownership information; in such circumstances, individuals can be held liable if they either [. . .]

What Are the Penalties for Violating BOI Reporting Requirements?

Question: What penalties do individuals face for violating BOI reporting requirements?

Answer: As specified in the Corporate Transparency Act, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. That person may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or [. . .]

What Events Require an Amended FinCEN BOI Report?

Question: What are some likely triggers for needing to update a beneficial ownership information report?

Answer: The following are some examples of the changes that would require an updated beneficial ownership information report:

  • Any change to the information reported for the reporting company, such as registering a new business name.
  • A change in beneficial owners, such as a new CEO, or a sale that changes who meets the ownership interest threshold of 25 percent.
  • Any change to a beneficial owner’s [. . .]

What if Beneficial Owner or Applicant Does Not have a Permanent Residential Address?

Question: What residential address should be reported if a reporting company is required to report an individual’s residential address, but that individual does not have a permanent residential residence?

Answer: The residential address that is current at the time of filing should be reported to FinCEN. An updated report should be submitted within 30 calendar days if the address, or any other information previously reported, changes.

Can a Picture be Omitted on an ID Image for Religious Reasons?

Question: If a beneficial owner or company applicant’s acceptable identification document does not include a photograph for religious reasons, will FinCEN accept the identification document without the photograph?

Answer: Yes. If a beneficial owner or company applicant’s identification document does not include a photograph for religious reasons, the reporting company may nonetheless submit an image of that identification document when submitting its report, as long as the identification document is one of the types of identification accepted by FinCEN, such as a non-expired State-issued identification document.

What are Acceptable Forms of Identification?

Question: What are some acceptable forms of identification that will meet the reporting requirement?

Answer: The only acceptable forms of identification are:

  1. A non-expired U.S. driver’s license (including any driver’s license issued by a commonwealth, territory, or possession of the United States);
  2. A non-expired identification document issued by a U.S. state or local government, or Indian Tribe;
  3. A non-expired passport issued by the U.S. government; or
  4. A non-expired passport issued by a foreign government (only when an individual [. . .]

What Beneficial Owner Info is Disclosed in a FinCEN BOI Report?

Question:  What information will a reporting company have to report about its beneficial owners in its FinCEN BOI report?

Answer: For each individual who is a beneficial owner, a reporting company will have to provide:

  1. The individual’s name;
  2. Date of birth;
  3. Residential address; and
  4. An identifying number from an acceptable identification document such as a passport or U.S. driver’s license, and the name of the issuing state or jurisdiction of the identification document (for examples of acceptable identification, see Question F.5).

The reporting [. . .]

Who are Beneficial Owners When Ownership is in Dispute?

Question: What should a reporting company report if its ownership is in dispute?

Answer:  If ownership of a reporting company is the subject of active litigation and an initial FinCEN BOI report has not been filed, a person authorized by the company to file its beneficial ownership information should comply with the requirements by reporting:

  • all individuals who exercise substantial control over the company, and
  • all individuals who own or control, or have a claim to ownership or control of, at least 25 percent [. . .]

Is an LLC’s or LP’s Tax Matters Partner a Beneficial Owner?

Question: Is a reporting company’s designated “partnership representative” or “tax matters partner” a beneficial owner?

Answer: It depends. A reporting company’s “partnership representative,” as defined in 26 U.S.C. 6223, or “tax matters partner,” as the term was previously defined, but has been repealed, is not automatically a beneficial owner of the reporting company. However, such an individual may qualify as a beneficial owner of the reporting company if the individual exercises substantial control over the reporting company, or owns or [. . .]

What are the Beneficial Owner Exceptions?

Question: Who qualifies for an exception from the beneficial owner definition?

Answer:  There are five instances in which an individual who would otherwise be a beneficial owner of a reporting company qualifies for an exception. In those cases, the reporting company does not have to report that individual as a beneficial owner to FinCEN.  The five exceptions are:

1. Minor Child: An individual qualifies for this exception if the individual is a minor child, as defined under the law of the State or [. . .]

Warning: Legal Consequences of Filing a False FinCEN BOI Report

This article is a must-read for every person who will file a FinCEN BOI Report.  Do not file a FinCEN BOI report unless you understand the legal consequences of filing a false report which is explained in this article.

If you submit or intend to submit a FinCEN Beneficial Owner Information report you need to understand that you can be fined and/or imprisoned if you file a FinCEN BOI report that contains false or fraudulent information.  People who file FinCEN reports for companies [. . .]

Who can Access Beneficial Ownership Information in a FinCEN Report?

Question: Who can access beneficial ownership information in a FinCEN BOI report?

Answer: FinCEN will permit Federal, State, local, and Tribal officials, as well as certain foreign officials who submit a request through a U.S. Federal government agency, to obtain beneficial ownership information for authorized activities related to national security, intelligence, and law enforcement. Financial institutions will have access to beneficial ownership information in certain circumstances, with the consent of the reporting company. Those financial institutions’ regulators will also have access to beneficial ownership information when they supervise the [. . .]

Who is the Beneficial Owner of a Company Owned by Another Company?

Question:  Homer Simpson and Marge Simpson own 25% of World Wide Widgets, LLC, as community property.  Ned Flanders, a single man, owns 75% of the LLC. World Wide Widgets, LLC, owns 100% of two subsidiary LLCs called Sub 1, LLC and Sub 2, LLC.  Which companies must file FinCEN reports and who is/are the beneficial owner(s) that must be named in the FinCEN report?

Answer:  Each company must file a FinCEN report.  Ned, Homer and Marge are all deemed to be beneficial owners of all three [. . .]

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