BOI reporting: what client information will accounting firms need to file on their behalf?

Odds are, your client base includes some of the tens of millions of small businesses that will be required to file a Beneficial Ownership Information (BOI) report with a branch of the U.S. Department of Treasury called the Financial Crimes Enforcement Network (better known as FinCEN). 

If your clients are coming to you with questions regarding Beneficial Ownership Information reporting and the Corporate Transparency Act (CTA), the basics are covered in another article that discusses the significant opportunity for accounting firms that comes with the CTA and BOI reporting. 

This article will discuss the information your clients will need to file their initial BOI report, as well as a few key definitions and dates. 

Reporting company required information

Under the Corporate Transparency Act, there are two types of reporting companies: domestic and foreign.

• A domestic reporting company is a corporation, limited liability company (LLC), or any entity created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe.
• A foreign reporting company is a corporation, LLC, or other entity formed under the law of a foreign country that is registered to do business in any state or tribal jurisdiction by the filing of a document with a secretary of state or any similar office.

The are a few pieces of information required for the reporting company:

• Legal name and trade name
• Complete current address
• Jurisdiction of formation
• IRS Taxpayer Identification Number (TIN)

Beneficial owner required information

Under the Corporate Transparency Act, a beneficial owner includes any individual who, directly or indirectly, either:

1. Exercises substantial control over a reporting company
2. Owns or controls at least 25 percent of the ownership interests of a reporting company

FinCEN does define what substantial control and ownership interest mean, and the rules have been drafted to account for various ownership or control structures. However, according to FinCEN, for those with simple organizational structures – which FinCEN assumes the majority of reporting companies will have - it should be a straightforward process to identify and report their beneficial owners.

Not surprisingly, FinCEN requires slightly different information from the beneficial owner. They include:

• Legal name and trade name
• Date of birth
• Complete current residential address
• A unique identifying number and the issuing jurisdiction from one of several documents (such as a passport or driver’s license)
• An image of the document that the unique identifying information was obtained from

Company applicant required information

The Corporate Transparency Act defines a company applicant to be only two persons:

• The individual who directly files the document that creates the entity, or in the case of a foreign reporting company, the document that first registers the entity to do business in the United States.
• The individual who is primarily responsible for directing or controlling the filing of the relevant document by another.

Interestingly, there’s no requirement that reporting companies existing or registered at the time of the effective date of the rule identify and report on their company applicants. In addition, there’s also no requirement for reporting companies formed or registered after the effective date of the rule to update company applicant information.

Information required from a company application includes:

• Legal name and trade name
• Date of birth
• Complete current address
• A unique identifying number and the issuing jurisdiction from one of several documents (such as a passport or driver’s license)
• An image of the document that the unique identifying information was obtained from