Much attention has been paid to the Corporate Transparency Act’s (CTA) requirement to file an initial beneficial ownership information (BOI) report (or BOIR) with the Financial Crimes Enforcement Network (FinCEN) between January 1, 2024 and January 1, 2025. Less attention has been given to what may be a more onerous requirement of the CTA – the updating requirement.
When do BOIR filing updates have to be submitted?
The rule implementing the CTA’s reporting requirement requires that an updated BOIR be filed within 30 calendar days of any change in the information reported about the company or its beneficial owners. FinCEN estimates that approximately 14.5 million updated reports will be filed each year.
What kind of changes trigger the BOIR filing update requirement?
Businesses may need to file BOIR updates regularly as business changes can be frequent. For example, it is not uncommon for companies to change their legal name, move their principal place of business, register a new assumed name, or redomesticate – all transactions which may trigger the need to file an updated BOIR.
A change in who their beneficial owners are also triggers the updating requirement. This is something to keep in mind not only upon a sale or transfer of ownership interests, but also if the company changes its president, CEO, or other senior officers, or if there is a change in the individuals who make important decisions for the company – all of whom may be considered beneficial owners as defined by the reporting rule.
Changes to beneficial owner’s personal information will require a BOIR update
Changes to the personal information required to be reported for each of the beneficial owners will also trigger the updating requirement. For example, an update may be required if any of the beneficial owners change their home address, change their legal name (such as a result of a marriage or divorce) or moves to a different state and gets a new driver’s license with a different number.
Note that any beneficial owner who obtains a FinCEN Identifier and whose FinCEN Identifier is reported on the BOI report instead of each piece of personal information will be responsible for updating their FinCEN Identifier application upon a change in their personal information.