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Compliance一月 24, 2024

The benefits of outsourcing Beneficial Ownership Information filing

As of January 1, 2024, the Corporate Transparency Act (CTA) is in force. This legislation mandates qualifying entities to gather, document, and submit their Beneficial Ownership Information (BOI) reports to FinCEN. The CTA has implications for a diverse array of millions U.S. registered businesses, whether foreign or domestic.

BOI filing can be a complex and time-consuming process. In this article, we explore the benefits of outsourcing BOI filing to a professional service provider, so you can focus more time on your business while also helping to reduce the chance for errors.

Which businesses are covered by the Corporate Transparency Act?

Every domestic or foreign entity registered to do business in the U.S. is subject to the CTA, unless considered exempt. If your business is a corporation, LLC or other entity, you may be required to submit information about your company’s beneficial owners to FinCEN. 

For more information on entities that are exempt from the filing requirement, see The 23 exemptions from the Corporate Transparency Act’s beneficial ownership information reporting requirement.

What are the benefits of working with a professional service provider for BOI filings?

Let’s examine the benefits of outsourcing your company’s BOI filing and what capabilities to look for.

Get a single source of truth for your BOI

A service provider can centralize all your beneficial ownership information in one location. Having a single source of truth for your beneficial ownership reporting requirements because it reduces time spent tracking down correct information, eliminates duplicate data, and minimizes the risk of errors from conflicting data sets.

Convenient dashboard tool and views

A service provider should offer a flexible single pane dashboard that provides a comprehensive overview of your data. Through this dashboard, you can easily view all submitted entities, check status, and organize information by sorting and grouping. Additionally, it should enable you to make updates without the need for re-entering information.

Importantly, these capabilities can alleviate some of the limitations of self-filing where you would have to maintain your own data. For example, while you can obtain a PDF as proof of a BOI filing after submitting to FinCEN, it doesn’t allow you to save a report or monitor the progress of your submission. In addition, if you need to make changes, you cannot reuse the PDF for any future filing needs. All required information must be resubmitted, not just the updated information.

For additional collaboration, a service provider should also offer you the ability to invite stakeholders who need to upload their information, such as beneficial owners, whether internal to the company or external, through a platform generated email. This allows team members to upload their information directly into the platform.

Next Steps for Your Business
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Reduce risk and safeguard PII 

A third-party service provider can enhance your ability to accurately prepare, submit, and track a BOI filing on your behalf, so you stay in compliance with the CTA. 

Outsourcing BOI filing also helps safeguard sensitive personal identifiable information (PII). BOI reporting requires you to collect and submit PII about your company’s beneficial owner(s). It may also require you to file information about the individual(s) with who first formed your entities or registered them to do business in the U.S., known as the company applicant. 

PII submitted to FinCEN includes name, residential address, date of birth, and a photocopy of an approved identification document (passport or driver's license). 

Given that sensitive PII warrants enhanced protection and may result in additional reporting or compliance obligations for the entity gathering and storing it, engaging a third-party service provider can aid in risk mitigation.

Ensure that the service provider allows you to submit beneficial owner and PII information confidentially, without others accessing it. For instance, instead of sending BOI data through email within your company or to the service provider, which poses security risks and expose the data to multiple individuals before reaching FinCEN, choose a provider that allows you to securely upload BOI and company applicant information directly to a third-party platform. 

By doing so, you can restrict access to BOI data to those with appropriate permissions.

Save time handling multiple entities

FinCEN requires reports to be filed per entity in order for them to transparently track ownership. This means businesses that need to report on a portfolio of entities or trusted advisors, such as law or accounting firms, filing for their clients, face the challenge of filing large volume of reports accurately to FinCEN. This can be a time consuming and error prone task that can be augmented through automation.

The right service provider can make managing multiple entities easier by offering secure and automated multi-report workflows. They should also allow multi-report creation, edit, and filing, eliminating the need to file individual BOI reports with FinCEN for each entity.

Manage ongoing compliance obligations

After you’ve filed your initial BOI report, it’s important to keep track of all the information you've reported and update it whenever it changes. 

While there are no annual reporting requirements after your initial BOI filing, as a reporting company you must report any changes to previously reported company or beneficial ownership information by filing an updated report no later than 30 days after the change. For example, a change in your principal place of business or a new residential address for a beneficial owner will trigger the need to file an updated report. 

Through a service provider, you can file an amended report using the information originally uploaded. The provider should also be able to track potential triggers, such as an expiring driver’s license – so you don’t have to.

According to FinCEN, 6.6 million businesses will update their reports in 2024, and 14.5 million updates each year thereafter, emphasizing the importance of ongoing compliance.

Use CT Corporation's Beneficial Ownership Platform for fast and accurate BOI filings

CT Corporation’s streamlined, secure, and automated workflow will reduce BOI filing times and errors and ensure you don’t face the threat of harsh civil and criminal penalties for non-compliance. Explore the benefits of our purpose-built Beneficial Ownership Platform, including:

  • Ease of use: Reduce BOI filing confusion and ensure compliance with our five-step filing process.
  • Efficient: Our fast and automated filing process can save hours on each filing.
  • Secure: Safeguard your sensitive PII using our robust security protocols.

Learn how CT Corporation’s Beneficial Ownership platform will help you confidently file your beneficial ownership reports.

The CT Corporation staff is comprised of experts offering global, regional, and local expertise on registered agent, incorporation, and legal entity compliance.

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