Transcript 139 – Andrea Miller on the Beneficial Ownership Information (BOI) Reporting Requirement

Transcript: 139 – Andrea Miller on the Beneficial Ownership Information (BOI) Reporting Requirement

Transcript for 139 – Andrea Miller on the Beneficial Ownership Information (BOI) Reporting Requirement

Today’s episode is more of a public service announcement for studio owners who have businesses that are registered in the US.

On January 1, a new reporting requirement from the US Treasury Department went into effect and it might impact you. I’m talking about the Beneficial Ownership Information Reporting rule.

Disclaimer:

Before I get too far into this, I should give my disclaimer. I am not a lawyer and I’m not giving legal advice here. This is strictly for informational purposes and it’s up to you to ensure your business is in compliance with all applicable laws.

Today I’m going to share what I learned in my research of the ruling. I’m going to go through this in a Q&A format that traces the path I took and the questions that came up for me as I determined whether or not I would be eligible and then what the registration process entailed.

Hopefully it’ll help you jumpstart your own research. 

 

OK, so, what’s the ruling?

The Beneficial Ownership Information reporting rule (or BOI reporting rule) is part of a larger Corporate Transparency Act that was adopted in an effort to crack down on financial crimes happening through anonymous businesses.

Who needs to register?

If you have registered your business in any way, this reporting requirement likely applies to you. So, if you have registered an LLC or – in some states you actually register as a sole-proprietor – if you’ve registered your business in any way with your secretary of State or a similar office, you may be considered a domestic reporting company for the purposes of this ruling.

I’m just going to read this part of BOI Reporting Rule Fact Sheet from the Financial Crimes Enforcement Network website. It says:

“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.” (end quote)

It goes on to define foreign reporting companies and a list of exceptions. I’ll have links to this in the show notes. It’s pretty broad on who it applies to. If you’re not sure if you’re eligible, talk to your accountant or lawyer and get their guidance.

I’m eligible, now what?

If the ruling applies to you, you’ll need to file a Beneficial Ownership Information Report with the Financial Crimes Enforcement Network (FinCEN). This form is pretty much just a form that says who the owners of the company are.

Where do I register?

You get this form from the Financial Crimes Enforcement Network (FinCEN) Website at fincen.gov.

What information do you need to get started?

The form is not complicated, to complete it you’ll need:

  • for each owner: Name, date of birth, address, a unique identifying number from an acceptable identification document (Driver’s license, Passport, etc.) for each beneficial owner (FinCEN ID may be used)
  • OR a FinCEN ID – more about that in a moment
  • scanned image of ID document (driver’s license or passport)

What is a FinCEN ID or FinCEN identifier?

A FinCEN ID is a number issued to a business OR an individual.

You’ll be given the option to Request one for your business during the BOI registration process by ticking a box.- yes/no?

You can also register for one yourself as an individual. You don’t have to, but it does simplify the BOI filing process.

I did because I knew I would have to file multiple BOI s and — registering for the FinCEN Id requires the same info – name, date of birth, address, driver’s license or passport ID number and photo of that doc, so it really wasn’t any more work to get the FinCEN ID and it saved me from having to enter my info over and over again.

If you decide to register for this ID, you do so at login.gov.

It took about 10 minutes to get the FinCEN ID and about half of that time was setting up two factor authentication. The ID number is issued immediately after submitting the application, so then you’re good to go on filing the BOI report.

How do you register?

Once you’ve got that info together, you’ll go to the FinCEN website and you’ve got two options for registering.

  • Download a PDF that you can fill out at your own pace and then upload to the site
  • Online registration – It’s worth noting that with the online you cannot save your work and return later, but the application isn’t very long, so that shouldn’t deter you
  • As far as I can tell, there’s no paper registration option.

With both options, there’s basically a four-page form with 1) a set of questions about the company, 2) a set of questions about the applicant, and 3) a set of questions about the owners.

Now, usually I loathe pdf registrations for things, but I wanted to be able to take notes for this episode while I was registering, so that’s what I opted for and I must say, it was impressively easy.

It’s not a PDF that you have to download, print, fill out, scan… no no no. It’s like a web form that you fill out digitally and then click a button from within the PDF when you’re ready to submit and that takes you to the website to upload it.

It was probably the best pdf registration experience I’ve had.

It took about 8 minutes to complete the PDF, obsessively review it three times because it seemed too easy, and then finally upload it.

Having the individual FinCEN ID definitely made the process easier. All I had to do was drop in that one ID number and it took care of an entire page, some 20+ fields, of the application.

And again, none of the fields are hard, it’s just tedious if you have to type in your address three times and upload the picture of your ID twice.

I have a bunch of LLCs to register for, so I’ll probably try the online form for the next one, but I really don’t know that it’ll be substantially faster. One perk to the PDF is that if you need to update in the future, you can just save that PDF and make your revisions there and then re-upload.

Now, it’s important to note. Once you click submit, If you requested to get a FinCEN ID for your company during the registration process, once you submit the BOI registration, you’ll get that FinCEN ID number on the confirmation page. So definitely print that page and file it away.

So that was the application process. Pretty painless.

How much does it cost?

There is no cost to register.

When do you need to register?

Companies that were formed prior to January 1, 2024 have until January 1, 2025 to register. Companies formed after January 1 of 2024 have 90 days to complete the registration. And starting in 2025, you have to file within 30 days of forming your company.

What are the consequences for not filing?

If your business is eligible and you don’t file, you can incur daily fines of $500/day up to $10,000 and up to 2 years in prison so, you’ll definitely want to take care of it if this applies to you.

And finally, how often do you have to renew?

The BOI Report is not something refiled annually, but you do need to update it anytime info changes – for instance, if you move or change your address, change your name or the company’s name, add a member to the LLC, etc – those are things that would cause you to need to update the report.

Summary and next action

Well, that about covers it. I addressed a lot here, from the background of the requirement to eligibility, where to file, what you can expect from the forms, how to get FinCEN IDs, not to mention the bajillion acronyms I threw out there…

So if I can just leave you with one next action, that would be to determine whether or not you are required to file the BOI Report. Just answer that one question and then go from there.

You can find the links for all the resources mentioned in this episode in the show notes at musicstudiostartup.com/episode139.

One last thing – if you’re headed to the MTNA conference in March, drop me a line. Nothing would make me happier than to meet up with listeners! I also hope you’ll mark your calendar to attend my Crash Course in Self-Employment Tax presentation on Sunday afternoon and the session I’m co-presenting on things to refresh in your studio each year. Spoiler alert: I’ll talking about tuition.

That’s all for today. Thanks for listening! I’ll be back next week.

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