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ComplianceJanuary 02, 2024

Restaurant considerations for FinCEN Beneficial Ownership Information reporting requirements

Every small business owner who owns one or more restaurants through a legal entity such as an LLC or corporation needs to be aware of a new compliance requirement that went into effect on January 1, 2024.

It’s imposed by a federal law called the Corporate Transparency Act (CTA) and it requires the filing of a beneficial ownership information (BOI) report with a federal agency called the Financial Crimes Enforcement Network or FinCEN.

This report must set forth personal information about the individuals who own or control that LLC or corporation. Violations of the CTA can result in harsh monetary penalties and even possible imprisonment. This article will answer some of the questions small business restaurant owners are asking about beneficial ownership information reporting.

Does my restaurant have to file a Beneficial Ownership Information report?

Did you form an LLC or corporation (or other entity that was created by filing a document with a secretary of state or equivalent office) to own your restaurant(s)?  Under the CTA, every LLC, corporation (or other entity) has to file a report unless it qualifies for one of the CTA’s 23 exemptions. 

Related resource: Determine if required to file. Take the quiz.

Are companies in the restaurant industry exempt from the Corporate Transparency Act?

There is no specific exemption for companies in the restaurant industry. Most of the exemptions are for companies that already file reports with the government that list beneficial owners such as publicly traded corporations, or industries already subject to substantial government regulation like financial institutions or insurance companies. However, it is important for the small business restaurant owner to review all 23 exemptions to see if any apply. In particular, there is an exemption for companies with more than 20 full-time employees in the U.S., that operate from a physical office in the U.S., and that filed a federal tax return for the previous year showing more than $5 million in gross receipts from U.S. sources. 

Related resource: The 23 exemptions from the Corporate Transparency Act’s beneficial ownership information reporting requirement

Next Steps for Your Business
Is your company required to file a beneficial ownership report?

If required, what information will my restaurant have to file with FinCEN?

It’s required to report the following information about the company:

  • legal name
  • dba names
  • business address
  • jurisdiction of formation
  • taxpayer identification number

It’s also required to report the following personal identifying information about each “beneficial owner”:

  • legal name
  • date of birth
  • residential address
  • unique number from an acceptable document such as a passport, driver’s license, or state ID, and an image of the document.

A beneficial owner is an individual who directly or indirectly either exercises substantial control over the company or who owns or controls at least 25 percent of its ownership interests.

And small businesses in the restaurant industry that are formed on or after January 1, 2024, and that are required to file a BOI report, also have to provide the personal identifying information of their “company applicant”.  This is the same kind of information that has to be provided for a beneficial owner except that individuals who are acting as company applicants in the course of their employment give their business address instead of their residential address.

A company applicant is the individual who directly files the document that creates the company and the individual that is primarily responsible for directing or controlling the filing of the relevant document, if there is more than one person involved.

Related resource: Beneficial Ownership Information reporting – What information is required?

When will my restaurant have to file its BOI report?

Initial BOI reports of companies existing before 2024 have to be filed between January 1, 2024 and January 1, 2025. Initial reports of companies formed on or after January 1, 2024 and before January 1, 2025 have to be filed within 90 days of receiving actual or public notice of its creation. Initial reports of companies formed on or after January 1, 2025 have to be filed within 30 days of receiving actual or public notice of its creation. If there is a change in information reported about the company or the beneficial owners, an updated report has to be filed within 30 days of the change.

The BOI report, and any required updates, must be filed with FinCEN, electronically, on FinCEN’s website. There is no filing fee.

Where can I get more information about the CTA’s impact on small businesses in the restaurant industry?

This article has provided a brief snapshot of BOI reporting under the Corporate Transparency Act for small business owners in the restaurant industry. The CTA itself, and the rule implementing the reporting requirement, are detailed and complex and beyond the scope of this brief article.

To learn more about how CT Corporation can help, contact a CT Corporation service representative or visit our Corporate Transparency Act resource page where you can sign up for updates.

And take the quiz to help determine your Beneficial Ownership Information filing status.

Sandra Feldman
Publications Attorney
Sandra (Sandy) Feldman has been with CT Corporation since 1985 and has been the Publications Attorney since 1988. Sandy stays on top of the most pressing and pertinent business entity law issues that impact CT customers of all sizes and segments.
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