FinCEN Updates Frequently Asked Questions on Beneficial Ownership Information (Updated January 2024)

01.15.24

By David H. Freedman and Jordan M. Small

For purposes of the Corporate Transparency Act (CTA) effective January 1, 2024, the Financial Crimes Enforcement Network (FinCEN) has recently updated its Beneficial Ownership Information (BOI) Frequently Asked Questions.

Beginning on January 1, 2024, many companies in the United States will have to report information about their beneficial owners—the individuals who ultimately own or control the company, under the CTA.

FinCEN is now accepting beneficial ownership information reports as of January 1, 2024..

Beneficial ownership information reporting is not an annual requirement. A report only needs to be submitted once, unless the filer needs to update or correct information. Companies that are required to comply must file by the following deadlines:

Reporting companies created or registered to do business in the United States before January 1, 2024 must file by January 1, 2025.
Reporting companies created or registered to do business in the United States in 2024 have 90 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective.
Reporting companies created or registered to do business in the United States on and after January 1, 2025 have 30 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective.

Below are the FAQ’s that have been updated on January 4, 2024 or issued on January 12, 2024 by FinCEN.

A. 3. Under the Corporate Transparency Act, who can access beneficial ownership information?

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 financial institutions.

FinCEN published the rule that will govern access to and protection of beneficial ownership information on December 22, 2023. Beneficial ownership information reported to FinCEN will be stored in a secure, non-public database using rigorous information security methods and controls typically used in the Federal government to protect non-classified yet sensitive information systems at the highest security level. FinCEN will work closely with those authorized to access beneficial ownership information to ensure that they understand their roles and responsibilities in using the reported information only for authorized purposes and handling in a way that protects its security and confidentiality.

[Updated January 4, 2024]

B. 1. Should my company report beneficial ownership information now?

FinCEN launched the BOI E-Filing website for reporting beneficial ownership information (https://boiefiling.fincen.gov) on January 1, 2024.

A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial BOI report.
A reporting company created or registered in 2024 will have 90 calendar days to file after receiving actual or public notice that its creation or registration is effective.
A reporting company created or registered on or after January 1, 2025, will have 30 calendar days to file after receiving actual or public notice that its creation or registration is effective.

[Updated January 4, 2024]

B. 4. Will there be a fee for submitting a beneficial ownership information report to FinCEN?

No. There is no fee for submitting your beneficial ownership information report to FinCEN.

[Updated January 4, 2024]

B. 5. How will I report my company’s beneficial ownership information?

If you are required to report your company’s beneficial ownership information to FinCEN, you will do so electronically through a secure filing system available via FinCEN’s BOI E-Filing website (https://boiefiling.fincen.gov).

[Updated January 4, 2024]

B. 6. Where can I find the form to report?

Access the form by going to FinCEN’s BOI E-Filing website (https://boiefiling.fincen.gov) and select “File BOIR.”

[Updated January 4, 2024]

C. 7. Can a company created or registered in a U.S. territory be considered a reporting company?

Yes. In addition to companies in the 50 states and the District of Columbia, a company that is created or registered to do business by the filing of a document with a U.S. territory’s secretary of state or similar office, and that does not qualify for any exemptions to the reporting requirements, is required to report beneficial ownership information to FinCEN. U.S. territories are the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, American Samoa, Guam, and the U.S. Virgin Islands.

[Issued January 12, 2024]

D. 11. What should a reporting company report if its ownership is in dispute?

If ownership of a reporting company is the subject of active litigation and an initial 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 ownership interests in the company.

If an initial BOI report has been filed, and if the resolution of the litigation leads to the reporting company having different beneficial owners from those reported (for example, because some individuals’ claims to ownership or control have been rejected), the reporting company must file an updated BOI report within 30 calendar days of resolution of the litigation.

[Issued January 12, 2024]

D. 12. Who does a reporting company report as a beneficial owner if a corporate entity owns or controls 25 percent or more of the ownership interests of the reporting company?

Ordinarily, such a reporting company reports the individuals who indirectly either (1) exercise substantial control over the reporting company or (2) own or control at least 25 percent of the ownership interests in the reporting company through the corporate entity. It should not report the corporate entity that acts as an intermediate for the individuals.

For an example of how to calculate the percentage of ownership interests an individual owns or controls in a reporting company if the individual’s ownership interests are held through an intermediate entity, please review example 4 in Chapter 2.3, “What steps can I take to identify my company’s beneficial owners?” of FinCEN’s Small Entity Compliance Guide.

Two special rules create exceptions to this general rule in very specific circumstances:

A reporting company may report the name(s) of an exempt entity or entities in lieu of an individual beneficial owner who owns or controls ownership interests in the reporting company entirely through ownership interests in the exempt entity or entities; or
If the beneficial owners of the reporting company and the intermediate company are the same individuals, a reporting company may report the FinCEN identifier and full legal name of an intermediate company through which an individual is a beneficial owner of the reporting company.

FinCEN’s Small Entity Compliance Guide includes additional information about these special reporting rules (see Chapter 4.2, “What do I report if a special reporting rule applies to my company?”).

[Issued January 12, 2024]

E. 5. The company applicants of a reporting company include the individual “primarily responsible for directing the filing of the creation or registration document.” What makes an individual “primarily responsible” for directing such a filing?

At most, two individuals need to be reported as company applicants:

the person who directly files the document with a secretary of state or similar office, and
if more than one person is involved in the filing of the document, the person who is primarily responsible for directing or controlling the filing.

For the purposes of determining who is a company applicant, it is not relevant who signs the creation or registration document, for example, as an incorporator. To determine who is primarily responsible for directing or controlling the filing of the document, consider who is responsible for making the decisions about the filing of the document, such as how the filing is managed, what content the document includes, and when and where the filing occurs. The following three scenarios provide examples.

Scenario 1: Consider an attorney who completes a company creation document using information provided by a client, and then sends the document to a corporate service provider for filing with a secretary of state. In this example:

The attorney is the company applicant who is primarily responsible for directing or controlling the filing because they prepared the creation document and directed the corporate service provider to file it.
The individual at the corporate service provider is the company applicant who directly filed the document with the secretary of state.

Scenario 2: If the attorney instructs a paralegal to complete the preparation of the creation document, rather than doing so themself, before directing the corporate service provider to file the document, the outcome remains the same: the attorney and the individual at the corporate service provider who files the document are company applicants. The paralegal is not a company applicant because the attorney played a greater role than the paralegal in making substantive decisions about the filing of the document.

Scenario 3: If the client who initiated the company creation directly asks the corporate service provider to file the document to create the company, then the client is primarily responsible for directing or controlling the filing, and the client should be reported as a company applicant, along with the individual at the corporate service provider who files the document.

[Issued January 12, 2024]

E. 6. Is a third-party courier or delivery service employee who only delivers documents that create or register a reporting company a company applicant?

No. A third-party courier or delivery service employee who only delivers documents to a secretary of state or similar office is not a company applicant provided they meet one condition: the third-party courier, the delivery service employee, and any delivery service that employs them does not play any other role in the creation or registration of the reporting company.

When a third-party courier or delivery service employee is used solely for delivery, the individual (e.g., at a business formation service or law firm) who requested the third-party courier or delivery service to deliver the document will typically be a company applicant.

Under FinCEN’s regulations, an individual who “directly files the document” that creates or registers the reporting company is a company applicant. Third-party couriers or delivery service employees who deliver such documents facilitate the documents’ filing, but FinCEN does not consider them to be the filers of the documents given their only connection to the creation or registration of the reporting company is couriering the documents.

Rather, when a third-party courier or delivery service is used by a firm, the company applicant who “directly files” the creation or registration document is the individual at the firm who requests that the third-party courier or delivery service deliver the documents.

For example, an attorney at a law firm may be involved in the preparation of incorporation documents. The attorney directs a paralegal to file the documents. The paralegal may then request a third-party delivery service to deliver the incorporation documents to the secretary of state’s office. The paralegal is the company applicant who directly files the documents, even though the third-party delivery service delivered the documents on the paralegal’s behalf. The attorney at the law firm who was involved in the preparation of the incorporation documents and who directed the paralegal to file the documents will also be a company applicant because the attorney was primarily responsible for directing or controlling the filing of the documents.

In contrast, if a courier is employed by a business formation service, law firm, or other entity that plays a role in the creation or registration of the reporting company, such as drafting the relevant documents or compiling information to be submitted as part of the documents delivered, the conclusion is different. FinCEN considers such a courier to have directly filed the documents—and thus to be a company applicant—given the courier’s greater connection (via the courier’s employer) to the creation or registration of the company.

For example, a mailroom employee at a law firm may physically deliver the document that creates a reporting company at the direction of an attorney at the law firm who is primarily responsible for decisions related to the filing. Both individuals are company applicants.

[Issued January 12, 2024]

E. 7. If an individual used an automated incorporation service, such as through a website or online platform, to file the creation or registration document for a reporting company, who is the company applicant?

If a business formation service only provides software, online tools, or generally applicable written guidance that are used to file a creation or registration document for a reporting company, and employees of the business service are not directly involved in the filing of the document, the employees of such services are not company applicants. For example, an individual may prepare and self-file documents to create the individual’s own reporting company through an automated incorporation service. In this case, this reporting company reports only that individual as a company applicant.

[Issued January 12, 2024]

F. 10. 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?

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. Please see Question F.5 for a list of acceptable identification documents.

[Issued January 12, 2024]

F. 11. What residential address should be reported if a reporting company is required to a report an individual’s residential address, but that individual does not have a permanent residential residence?

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.

FinCEN’s Small Entity Compliance Guide includes additional information on what information must be reported in Chapter 4, “What specific information does my company need to report?” and what to do when previously reported information needs to be updated in Chapter 6.1 “What should I do if previously reported information changes?”

[Issued January 12, 2024]

G. 3. How can I obtain a Taxpayer Identification Number (TIN) for a new company quickly so that I can file an initial beneficial ownership information report on time?

The Internal Revenue Service (IRS) offers a free online application for an Employer Identification Number (EIN), a type of TIN, which is provided immediately upon submission of the application. For more information on TINs, see “Taxpayer Identification Numbers (TIN)” at IRS.gov (https://www.irs.gov/individuals/international-taxpayers/taxpayer-identification-numbers-tin). For more information on Employer Identification Numbers and to access the EIN online application, see “Apply for an Employer Identification Number (EIN) Online” at IRS.gov (https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online).

A paper filing is required if a foreign person that does not have an Individual Taxpayer Identification Number (ITIN) applies for an EIN. According to the IRS, receiving an EIN through this process could take six to eight weeks. If you are a foreign person that may need to obtain an EIN for a reporting company, we recommend applying early for an ITIN. Foreign reporting companies that are not subject to U.S. corporate income tax may report a foreign tax identification number and the name of the relevant jurisdiction instead of an EIN or TIN.

[Updated January 4, 2024]

L. 6. Does a subsidiary whose ownership interests are partially controlled by an exempt entity qualify for the subsidiary exemption?

No. If an exempt entity controls some but not all of the ownership interests of the subsidiary, the subsidiary does not qualify. To qualify, a subsidiary’s ownership interests must be fully, 100 percent owned or controlled by an exempt entity.

A subsidiary whose ownership interests are controlled or wholly owned, directly or indirectly, by certain exempt entities is exempt from the BOI reporting requirements. In this context, control of ownership interests means that the exempt entity entirely controls all of the ownership interests in the reporting company, in the same way that an exempt entity must wholly own all of a subsidiary’s ownership interests for the exemption to apply.

[Issued January 12, 2024]

M. 2. How can I use a FinCEN identifier?

When a beneficial owner or company applicant has obtained a FinCEN identifier, reporting companies may report the FinCEN identifier of that individual in the place of that individual’s otherwise required personal information on a beneficial ownership information report.

A reporting company may report another entity’s FinCEN identifier and full legal name in place of information about its beneficial owners when three conditions are met: (1) the other entity obtains a FinCEN identifier and provides it to the reporting company; (2) the beneficial owners hold interests in the reporting company through ownership interests in the other entity; and (3) the beneficial owners of the reporting company and the other entity are the exact same individuals.

[Updated January 12, 2024]

M. 3. How do I request a FinCEN identifier?

Individuals may request a FinCEN identifier starting January 1, 2024, by completing an electronic web form at https://fincenid.fincen.gov. Individuals will need to provide their full legal name, date of birth, address, unique identifying number and issuing jurisdiction from an acceptable identification document, and an image of the identification document. After an individual submits this information, they will immediately receive a unique FinCEN identifier.

Reporting companies may request a FinCEN identifier by checking a box on the beneficial ownership information report upon submission. After the reporting company submits the report, the company will immediately receive a unique FinCEN identifier. If a reporting company wishes to request a FinCEN identifier after submitting its initial beneficial ownership report, it may submit an updated beneficial ownership information report requesting a FinCEN identifier, even if the company does not otherwise need to update its information.

[Updated January 4, 2024]

N. 1. Can a third-party service provider assist reporting companies by submitting required information to FinCEN on their behalf?

Yes. Reporting companies may use third-party service providers to submit beneficial ownership information reports. Third-party service providers will have the ability to submit the reports via FinCEN’s BOI E-Filing website or an Application Programming Interface (API). To request the API technical specifications, use FinCEN’s contact form (https://www.fincen.gov/contact). Please do the following when submitting your inquiry: (1) select the topic associated with Beneficial Ownership (BO) / Corporate Transparency Act (CTA); (2) select the subject associated with API requests; (3) in the message body, indicate the nature of your API-related inquiry (e.g., “I would like to review the API technical specifications,” “I would like to request access to the API,” etc.).

[Updated January 4, 2024]

If you have questions about the Corporate Transparency Act and its impact on your business, or need assistance with a filing, contact David H. Freedman, Jordan M. Small, or your Maddin Hauser attorney.