How to File BOI for LLC: Step-by-Step Guide

Introduction to beneficial ownership information (BOIR)

The Federal Corporate Transparency Act introduced significant reforms to anti-money-laundering laws—the main one being beneficial ownership information (BOI) reporting. Beneficial ownership information refers to providing accurate information about who actually owns or runs the legal business entity.

What is beneficial ownership information?

Domestic businesses can voluntarily identify individuals associated with the company. Foreign businesses—entities formed under the law of a foreign country that are registered to conduct business in U.S. jurisdictions—are required to report.

As defined by the CTA, a beneficial owner is any non-U.S. citizen who owns or controls at least 25% of an LLC or exercises substantial control in any of the following ways:

• They serve as a senior officer, president, CEO, or general counsel.
• They have the power to appoint or remove senior officers, board members, and other similar roles.
• They make strategic decisions, such as deciding which markets or geographic areas the business will enter or exit.
• They make crucial financial decisions like approving operating budgets or deciding compensation for others.
• They have the authority to change or dissolve the business structure.

Understanding the Corporate Transparency Act

The Corporate Transparency Act mandates that foreign businesses meeting certain criteria, known as "reporting companies," provide beneficial owner information to the Financial Crimes Enforcement Network under the U.S. Department of the Treasury.

Congress initiated the CTA in 2021 to strengthen and secure the business environment while promoting transparency and increasing accountability. For instance, by knowing who truly owns and controls businesses, FinCEN can clamp down on the use of shell companies that run illegal activities.

Importance of filing BOI for LLCs

Beneficial ownership information reporting plays a vital part in enabling FinCEN to do its job. Only when the federal government has access to updated and accurate information about each company's beneficial owners will it be able to effectively investigate financial crimes, prevent money laundering and human trafficking, and protect fair-trade practices.

You might ask, "Why is this important for my company?" When your limited liability company provides beneficial ownership information to FinCEN, you are being a responsible business owner doing your part in safeguarding the community and country. 

Who should consider filing a BOI Report?

Foreign LLCs (formed outside the U.S.) are required to file a BOI Report.

Criteria for reporting companies

Foreign reporting companies are LLCs initially formed in a foreign country and then registered to do business in the U.S. by submitting a document with the Secretary of State or similar government authority. If your LLC was initially formed in Germany and then registered to do business in Delaware, then you would be a foreign reporting company.

If your business meets this definition, then you are legally required to report your company's ownership interests unless you fall under an exemption. 

The deadlines for foreign reporting companies are as follows:

• Entities registered before the rule's publication must file BOI reports within 30 days of publication.
• Entities registering after the rule’s publication must file BOI reports within 30 calendar days of their registration becoming effective.

Exemptions from BOI filing

The CTA has a list of business entities that are exempt from filing Beneficial Ownership Information reports. Exemptions include but are not limited to companies operating in heavily regulated industries like banking and insurance, publicly traded companies, and those registered under the Commodities Exchange Act.

If you're wondering, "Is my company exempt?" speak to a business attorney. They can help you carefully review the exemption criteria.

The role of beneficial owners

As stated earlier, a beneficial owner is an individual who has at least 25% of the reporting company's ownership interests or can exercise substantial control over the company's operations. Apart from equity, ownership interests can be established through shares of stock, voting rights, and capital or profit interests.

Beneficial owners can provide vital details about themselves, such as their complete legal name and government-issued ID number, in the beneficial ownership report. Beneficial owners actively contribute to the overall goal of increasing transparency and combating financial crime when they fulfill their BOI reporting obligations. 

Step-by-step guide on how to file BOI for LLC

Effortlessly file the BOI for your LLC by using our detailed guide.

Collect beneficial ownership information

The BOI requests detailed information and documentation about your foreign LLC, its beneficial owners, and possibly even company applicants.

A company applicant is the person who actually filed your LLC formation paperwork with the Secretary of State. If you utilized a formation service to register your LLC, the company applicant would be the formation company's employee who completed the paperwork.

Gather the following information for each beneficial owner and company applicant (if applicable):

• Legal name
• Date of birth
• Residential street address
• Identification number from an accepted document (non-expired passport or driver’s license)

Complete BOI Report form

To start the online application process, go to FinCEN’s BOI reporting portal and select the "BOI E-Filing" option.

You will be led to a page where you can select your filing method—online or PDF. To use the latter option, your computer must have Adobe Acrobat Reader installed. While you can complete the PDF at your own pace, you'll have to go back online to submit it.