The Financial Crimes Enforcement Network (FinCEN) is trying to crack down on bad actors hiding ownership of entities that operate in the United States. To do that, a law was passed in 2021 that requires (almost) all existing and new entities to file a BOI, which is a Beneficial Ownership Information Report.
Yes, there are civil and criminal penalties for non-compliance, but compliance is so easy, an entity should never have to face a penalty. First, the BOI is filed with FinCEN but it is not a public document, so any concerns you may have with your personal information “out there for everyone to see” is similar to having tax returns filed with the IRS. In other words, unless a hacker breaks into FinCEN’s website, your private information should remain private.
Who has to file? All U.S. Entities and all foreign entities operating in the U.S. There are 23 exceptions, most of which apply to financial institutions, tax exempt entities such as a 501c, a general partnership, and others. The exemption that is most applicable to the construction work is an entity that reports more than $5M in gross receipts each year and maintains at least 20 employees working 30+ hours per week. If that’s you, then no report is required, presumably because U.S. Dept. of the Treasury already have your info.
When do you need to file? If your entity was created before 1/1/2024 you have until 12/31/2024 to file your report. If your entity was created any time in 2024 you have 90 days to file. If you create your entity any time on or after 1/1/2025 you’ll have 30 days to file the BOI. You will also need to update your filing anytime the information on the BOI changes, such as an address change, adding a new beneficial owner or controller.
How do you file? You can do the filing online at boiefiling.fincen.gov/boir/html. That same website has a pdf option, although I could not get that link to work.
What information is required? The company has to reports its full legal name, any dba, business address, jurisdiction, and EIN. For the individuals, you must report the full legal name, DOB, home address, unique ID such as driver’s license or passport number of anyone who exercises substantial control over a reporting company and/or owns or controls at least 25 percent of the ownership interests of a reporting company. Substantial control, basically is the right to make important decisions and direct operations of the entity.
FinCEN has created a great booklet that should answer the great majority of your questions and will guide you through the entire reporting process from determining if your entity needs to report through how to determine who the beneficial owners are to where to go to get questions answered, although of course we’re happy to be a resource on this new filing requirement as well.
You can search “FinCEN small entity compliance guide” or use this link to access: https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide_FINAL_Sept_508C.pdf for more information.
Karen Ensley
Board-Certified Construction Law Attorney
Ensley Benitez Law, PC
Note the information provided herein is educational in nature only. It does not constitute specific legal advise and its transmission does not form an attorney client relationship. We recommend you consult an attorney with specific questions on the application - or not - of the information provided to your particular circumstances.
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