Information and text below provided as courtesy by Ivars Slokenbergs, Slokenpergs PLLC
Urgent Jan. 1st deadline for US Legal Entities to file Beneficial Ownership report
There is an important matter of legal compliance that must be taken care of by most US companies, with a deadline of January 1, 2025. A new Federal law is in effect, which requires the mandatory reporting of the beneficial owners of most US legal entities. This reporting is intended to fight financial crimes (money laundering, financing of terrorism, etc.) and the information must be reported to the US Treasury Department, specifically to the Financial Crimes Enforcement Network (FinCEN). The reported information will not be publicly available – it will be kept in a Federal government database. Failure to file may lead to severe financial penalties against the company (and willful non-compliance could lead to criminal liability).
Background information available here:
https://www.fincen.gov/boi-faqs#B_1
Submitting the required Beneficial Ownership Information Report (BOIR) is relatively simple – it can be done in an online form. The LACC is providing the below as general information, and not as legal advice. It is advisable to consult with a legal advisor, to ensure submissions to FinCEN are compliant with law.
The basic information that must be reported in the BOIR includes the company’s tax ID number (EIN) and principal place of business address.
In addition, the BOIR must include beneficial owners’ information, which are defined as:
- persons owning at least 25% of corporation shares or LLC membership interests – directly or indirectly; or
- persons who directly or indirectly “exercise substantial control” over the company – this includes all “senior officers”, including the CEO, CFO, COO, general counsel, etc, and any other person with “substantial influence” over the company’s business, finances and structure. In addition, any member of the Board of Directors (not otherwise deemed a beneficial owner per the above) may be considered a beneficial owner – if it is determined that such person exercises “substantial control” over the company.
The following information is required to be submitted in the BOIR for each “Beneficial Owner”:
- Full name, including middle name
- Date of Birth
- Residential address
- ID number of US driver’s license, US passport or foreign passport
- JPG image of the person’s ID document
Privacy Concerns:
If any Beneficial Owner is concerned about privacy and does not wish to disclose the required information to other company personnel, that person can input data itself into the FinCEN system and obtain a FinCEN identifier. Such person would go to https://fincenid.fincen.gov/landing – and set up a personal account as a “reporting individual” – input the above personal data and upload a copy of its ID document — afterward, the person will receive a “FinCEN identifier” number. Such FinCEN identifier can then be submitted to the company, for use in completing the company’s BOIR report.
Follow-up Reporting:
Please note that BOIR reporting is a continuing obligation. If in the future there are changes in the information submitted in the BOIR report, including changes in beneficial owners (substantial control exercisers), such information will have to be updated within 30 days of the change.