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FINCEN BOI REPORTING SOLUTION FOR YOUR BUSINESS


WHAT IS THE FINCEN BOI REPORT?

Beginning January 1, 2024, the Corporate Transparency Act(CTA) has mandated that
all US-based and foreign businesses in the 50 states report Beneficial Ownership
Information (BOI). To comply with these new laws, you must file a BOI Report
with the Financial Crimes Enforcement Network (FinCEN).


WHO IS REQUIRED TO FILE THE
BOI REPORT?

Both domestic and foreign reporting companies
are required to file BOI reports.


DOMESTIC REPORTING COMPANY

All beneficial owners of a US-based LLC that fits the requirements must file
their
details in a BOI report.


FOREIGN REPORTING COMPANY

Most businesses created in the U.S. before January 1, 2024, required to file
a BOI report.

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WHAT INFORMATION IS NEEDED TO FILE THE
BOI REPORT?

The following information is needed to submit your
BOI Report
to FinCEN.


REPORTING COMPANY DETAILS:

When filing with reportctaboi, you only need to submit your company name, EIN,
and business address.


COMPANY APPLICANT(S) & BENEFICIAL
OWNER DETAILS:

Name, Date of Birth, Address, and Identity Proof are required to
File BOI Report




FREQUENTLY ASKED QUESTIONS ON BOI REPORT


WHY IS A BENEFICIAL OWNERSHIP INFORMATION (BOI) REPORT REQUIRED?

The US Corporate Transparency Act was introduced to increase transparency of
company ownership structures and help combat illicit activities. It requires
companies to disclose their beneficial owners to the Financial Crimes
Enforcement Network (FinCEN) to prevent the misuse of corporations and limited
liability companies for criminal activities such as money laundering, fraud, and
financing of terrorism. In September 2022, FinCEN finalized a rule introducing a
reporting obligation for beneficial ownership information (BOI) under the CTA.
Many business entities must disclose their ownership and control data, with
FinCEN accepting BOI reports since January 1 of this year.


WHO HAS TO FILE A BENEFICIAL OWNERSHIP INFORMATION (BOI)?

There are two types of companies required to report under the BOI rules set out
by FinCEN:

 * Domestic reporting companies include corporations, limited liability
   companies, and other entities formed by filing a document with a secretary of
   state or a similar US office.
 * Foreign reporting companies are entities, such as corporations and limited
   liability companies, formed under a foreign country's laws. These entities
   have registered to do business in the US by filing the necessary documents
   with a secretary of state or a similar office.

Some reporting companies, including publicly traded companies that meet specific
requirements, certain nonprofits, and large operating companies, are exempt from
these reporting obligations.


WHO IS A BENEFICIAL OWNER?

The beneficial owner is any individual or entity responsible for having
substantial control over a reporting company (or) owning more than 25% ownership
interest in a reporting company, either directly or indirectly.

An individual can be a beneficial owner through substantial control, ownership
interests, or both. Reporting companies are not required to disclose the reason
(i.e., substantial control or ownership interests) for an individual being a
beneficial owner. A reporting company can have multiple beneficial owners.


WHAT DOES SUBSTANTIAL CONTROL MEAN?

A reporting firm must identify all the beneficial owners who have substantial
control over a company. Any of the following indicates a person who exercises
substantial control:

 * Senior officer—Serves in key positions like president, chief executive
   officer(CEO), chief financial officer(CFO), general counsel (GC), chief
   operating officer(COO), or any other officer, regardless of official title,
   who performs a similar function
 * Authority to appoint or remove - Having the authority to appoint or remove
   any officers, board members, and senior officers.
 * Decision makers - Rights to make important decisions regarding the reporting
   company’s finances, businesses, and structure.
 * Other significant control - Exercise significant control over a reporting
   company in different ways, which is
   still substantial.


WHAT IS OWNERSHIP INTEREST?

Ownership interest refers to the stake or shares an individual holds in a
company, which can come in various forms. Reporting companies must identify all
individuals who own or control at least 25 percent of the company's ownership
interests. These ownership interests can include:

 * Equity
 * Stock or voting rights
 * Capital or profit interest
 * Convertible instruments
 * Options or non-binding privileges
 * Any other instruments, contracts, or arrangements that establish an ownership
   in the company.

A reporting company may have various types of ownership interests.


WHO IS NOT CONSIDERED AS THE BENEFICIAL OWNER?

There are five specific situations where an individual who would usually be
considered a beneficial owner of a reporting company qualifies for an exception.
In these instances, the reporting company is not required to disclose that
individual as a beneficial owner to the FinCEN. The following individuals are
not considered as the beneficial owners:

 * Minor Child
   If the individual is a minor child, provide the parents or guardians' details
   instead of the minor child's information. This exception no longer applies
   when the child reaches the majority age. At that time, a reporting company
   should submit the updated BOI report with the correct information of the
   individual(minor child) who is a beneficial owner.
 * Nominee, intermediary, custodian, or agent
   The individual represents the person on behalf of the actual beneficial owner
   as their nominee, intermediary, custodian, or agent.
 * Employee
   The individual working as an employee in a reporting company should not be in
   a high position like the president, chief financial officer, general counsel,
   chief executive officer, chief operating officer, or any other officer,
   regardless of official title, who performs a similar function.
 * Inheritor
   An individual will give their interest in the company through rights of
   inheritance in the future. This exception no longer applies when the person
   inherits their interest. Upon inheriting, an individual becomes the
   beneficial owner of the reporting company.
 * Creditor
   An individual who would satisfy the complete definition of the beneficial
   owner is referred to as a creditor.


WHAT INFORMATION SHOULD BE GIVEN BY THE BENEFICIAL OWNERS?

The following information should be given by the beneficial owners in the BOI
report:

 * Name
 * Date of Birth
 * Residential address
 * Unique identifying number
 * Image of an acceptable document such as a driver's license, U.S. passport, or
   the name of the issuing jurisdiction or state of the identification
   document10


IS AN ACCOUNTANT OR LAWYER CONSIDERED A BENEFICIAL OWNER?

Typically, accountants and lawyers are not considered beneficial owners of a
reporting company. This determination depends on the nature of
their work.

 * General Services: When accountants and lawyers provide standard accounting or
   legal services, they do not qualify as beneficial owners. This is because
   these services are considered ordinary, arms-length advisory or third-party
   professional services and do not amount to “substantial control” over the
   company.
 * Designated Agents: If an accountant or lawyer is designated as an agent of
   the reporting company, they might fall under the “nominee, intermediary,
   custodian, or agent” exception. This exception means they are not considered
   beneficial owners simply because of their role as an agent.
 * Senior Officers: However, if an individual holds a position such as general
   counsel within the reporting company, they are considered a “senior officer.”
   Senior officers are deemed beneficial owners due to their significant role
   and authority within the company.


WHAT DETAILS MUST A REPORTING COMPANY PROVIDE CONCERNING A BENEFICIAL OWNER WHO
HOLDS OWNERSHIP STAKES THROUGH MULTIPLE
EXEMPT ENTITIES?

 * Suppose a beneficial owner exclusively holds or controls ownership interests
   in a reporting company through multiple exempt entities. In that case, all
   names of those exempt entities can be reported to FinCEN instead of the
   individual beneficial owner's details.
 * However, this rule doesn't apply if an individual owns or controls ownership
   interests in a reporting company through both exempt and non-exempt entities.
   In such instances, the reporting company must disclose the individual as a
   beneficial owner (unless an exception applies), while the exempt entities
   need not be listed.


CAN BENEFICIAL OWNERS OWN OR CONTROL REPORTING COMPANIES THROUGH TRUSTS?

Yes, beneficial owners can own or control a reporting company through trusts.
This can happen in two main ways:

 * Substantial Control: A beneficial owner might exercise substantial control
   over the reporting company via the trust. This means they have the authority
   to make important decisions or influence the management and policies of the
   company through their position in the trust.
 * Ownership Interests: A beneficial owner might own or control the ownership
   interests of the reporting company that are held within the trust. This means
   they have a stake in the company's equity or financial interests through the
   trust.

In both scenarios, trust is the mechanism through which the beneficial owner
exerts influence or ownership over the reporting company.


WHAT ARE THE PENALTIES FOR VIOLATING THE BOI REPORTING REQUIREMENTS?

A person who deliberately fails to comply with the Beneficial Ownership
Information (BOI) reporting requirements can face both civil and
criminal penalties:

 1. Civil Penalties: An individual may incur a civil penalty of up to $591 for
    each day the violation persists. This daily penalty amount is subject to
    annual adjustments for inflation.
 2. Criminal Penalties: An individual may face criminal penalties, including
    imprisonment for up to two years and a fine of up to $10,000.

Potential violations that could lead to these penalties include:

 * Willfully Failing to File: Not submitting the required BOI report
   intentionally.
 * Willfully Filing False Information: Intentionally providing incorrect BOI in
   the report.
 * Willfully Failing to Correct or Update: Deliberately not correcting or
   updating previously submitted BOI that has changed or was incorrect.

These penalties underscore the importance of accurate and timely reporting of
beneficial ownership information.


WHAT IS FINCEN ID AND HOW TO USE IT?

A "FinCEN identifier" or "FinCEN ID" is a unique 12-digit number issued by the
Financial Crimes Enforcement Network (FinCEN), part of the U.S. Department of
the Treasury. This identifier is issued to individuals or entities that request
it by submitting the required information to FinCEN. This ID can be included in
Beneficial Ownership Information Reports (BOIRs) submitted to FinCEN.

There are two types of FinCEN IDs:

 * IDs for individuals which start with the digit 3 (e.g., 300000000000)
 * IDs for entities that begin with the digit 2 (e.g., 244444444444)

Note: If you are applying for a FinCEN identifier for an entity, you should
apply using the BOIR and strictly adhere to the specific BOIR Filing
Instructions, which are different from the general instructions provided here.

How to use FinCEN ID: A FinCEN ID can streamline the Beneficial Ownership
Information Report (BOIR) filing submitted to FinCEN. Instead of providing
beneficial owner or company applicant detailed personal information such as
name, date of birth, address, and unique identifying document number,
jurisdiction, and image, you can use your FinCEN ID. This makes the process of
filing BOIRs more streamlined and systematic.


HOW TO OBTAIN A FINCEN IDENTIFIER?

FinCEN Identifiers for Individuals: Beginning January 1, 2024, individuals can
request a FinCEN identifier by filling out an electronic web form available on
the official website at https://fincenid.fincen.gov. To obtain a FinCEN ID,
individuals must provide:

 * Full legal name
 * Date of birth
 * Address
 * Unique identifying number and issuing jurisdiction from an acceptable
   identification document
 * An image of the identification document

Rest assured, once this information is submitted, individuals will promptly
receive a unique FinCEN identifier.

FinCEN Identifiers for Reporting Companies: The process is equally efficient for
reporting companies. During submission, they can request a FinCEN identifier by
selecting an option on the beneficial ownership information report (BOIR). The
company will immediately receive a unique FinCEN identifier upon submitting the
report. If a reporting company wants to request a FinCEN identifier after
submitting its initial beneficial ownership report, it can do so by submitting
an updated BOIR. This request can be made even if there is no other need to
update the company's information at
that time.