Below are some of the questions and answers LLC owners and managers need to know about BOI reporting which went into effect on January 1, 2024.
What is a BOIR filing?
The CTA requires the reporting of beneficial ownershipinformation. Beneficial ownership information refers to identifying information about the individuals who directly or indirectly own or control a company. This information is provided to a federal agency called FinCEN in a BOIR filing.
What is the beneficial ownership rule for an LLC?
The CTA requires a BOIR to be filed by every entity that meets the definition of a “reporting company”. An LLC is defined by the CTA as a reporting company. Therefore, every LLC created in the USA will have to file a BOI report unless it qualifies for an exemption.
Can an LLC be exempt from a BOIR filing ?
Yes. There are 23 exemptions. If an LLC qualifies for one of these, the LLC is exempt. However, LLCs will not qualify for most of these exemptions because they mainly include entities that are already subject to government regulation and file reports with government agencies such as public corporations, financial institutions, insurance companies, and tax exempt entities.
Is there an exemption based on the size of the LLC?
Yes. Companies are exempt from the definition of a reporting company if they employ more than 20 full time employees in the US, have an operating presence at a physical office in the US, and filed a federal income tax or information return for the previous year showing more than $5 million in gross receipts or sales.
What information will my LLC have to provide in its BOIR filing?
The report has to includethe company’s legal name and any trade or DBA names, its principal place of business address, the jurisdiction where it was formed, and its taxpayer identification number.
For each of your company’s beneficial owners (and company applicants for LLCs created on or after January 1, 2024) the report has to provide the individual’s legal name, birthdate, home address (except for certain company applicants, who have to provide a business address), and an identifying number from a driver’s license, passport, or state ID, as well as an image of the document from which that number was obtained.
Does an LLC have a beneficial owner?
Yes. A beneficial owner is defined as any individual who, directly or indirectly, either exercises substantial control over a reporting company or owns or controls at least 25 percent of the reporting company’s ownership interests. Every LLC will have at least one beneficial owner. For example, even if there was no individual who owned 25% of the LLC, there will still be one or more individuals who are able to make important decisions on behalf of the LLC, or who otherwise exercise substantial control over the LLC.
Who is not a beneficial owner?
A beneficial owner has to be an individual. In addition, “beneficial owner” does not include a minor child (although the information of their parent or guardian has to be reported); an individual acting as a nominee, intermediary, custodian, or agent of another individual; an employee acting solely as an employee; an individual whose only interest in the company is a future interest through a right of inheritance; and a creditor.
Does an LLC have a company applicant?
Yes. There can be up to two individuals who qualify as company applicants — (1) the individual who directly files the document that creates the LLC and (2) the individual that is primarily responsible for directing or controlling the filing of the document. Even though LLCs created before 2024 have a company applicant, they do not have to report any information about their company applicant. Only LLCs created in 2024 and beyond are required to do so.
When is my LLC's initial BOIR due?
LLCs created before January 1, 2024 can file their initial report beginning on January 1, 2024. The report must be filed by January 1, 2025. LLCs created on or after January 1, 2024 and before January 1, 2025, have to file their initial report within 90 calendar days of receiving actual or public notice of their creation. LLCs created on or after January 1, 2025 have to file their initial report within 30 calendar days of receiving actual or public notice of their creation.
