Beginning January 1, 2024, most small entities—including single member LLCs—must file online reports with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, disclosing information about the beneficial owners of the entities.  

This new reporting requirement—estimated to impact at least 32.6 million entities in 2024—was created by the Corporate Transparency Act (CTA). Existing entities have until January 1, 2025, to make their first beneficial ownership information (BOI) report.

Do I have to File?  

If you are an LLC, Corporation, LLP or Limited Partnership in New York, yes you do. 

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, unless excepted from the reporting requirement, must file. Examples of exempt entities include tax-exempt and government. (The list of exempt entities is in this FAQ.)  

For-profit farms are not on the exempt list. Single-member LLCs are subject to BOI reporting requirements. Sole proprietorship farms are exempt since they do not file with the Secretary of State in New York. 

Why on Earth do I have to do this? 

In 2021, Congress passed the Corporate Transparency Act on a bipartisan basis. This law creates a new reporting requirement as part of U.S. government efforts to make it harder for bad actors to use shell companies or opaque ownership structures to hide or benefit from ill-gotten gains. 

What Happens if I Don't File?  

You should file because the penalties are large, and it is straightforward to file. 

Failure to file a BOI report can result in severe civil and criminal penalties! If you don't file a BOI report, you could face a $500-per-day fine, up to $10,000, and up to two years in prison. 

Where to File: https://boiefiling.fincen.gov/....  

How will this information be used and who can see it? 

Beneficial ownership information reported to FinCEN is exempt from disclosure under the Freedom of Information Act (FOIA). FinCEN published the rule that will govern access to and protection of beneficial ownership information on December 22, 2023. According to the website, beneficial ownership information reported to FinCEN is stored in a secure, non-public database using rigorous information security methods and controls typically used in the Federal government to protect non-classified yet sensitive information systems at the highest security level. 

In accordance with the Corporate Transparency Act, FinCEN may permit access of beneficial ownership information to:  

·     Federal agencies engaged in national security, intelligence, or law enforcement activity. 

·     State, local, and Tribal law enforcement agencies with court authorization. 

·     Officials at the Department of the Treasury. 

·     Foreign law enforcement agencies, judges, prosecutors, and other authorities that submit a request through a U.S. Federal agency to obtain beneficial ownership information for authorized activities related to national security, intelligence, and law enforcement. 

·     Financial institutions with customer due diligence requirements under applicable law (to facilitate compliance with those requirements). 

·     Federal functional regulators or other appropriate regulatory agencies that supervise or assess financial institutions with access to beneficial ownership information (to supervise such financial institutions' compliance with customer due diligence requirements). 

What Information Will I have to Provide?   

For the company: 

·     Full legal name 

·     Any trade name or "doing business as" name 

·     Complete current U.S. address 

·     Jurisdiction of formation (including State or Tribal jurisdiction for a domestic reporting company) 

For each beneficial owner and each company applicant required to be reported:  

·     Full legal name 

·     Date of birth 

·     Complete current address 

·     Unique identifying number and issuing jurisdiction from one of the following non-expired documents:  

·     U.S. passport 

·     Identification document issued by a State, local government, or Indian Tribe  

·     State-issued driver's license  

·     If none of the above are available, a foreign passport, and an image of the document from which the unique identifying number was obtained. 

What is a "Beneficial Owner"? 

In general, beneficial owners are individuals who: 

1.  Directly or indirectly exercise "substantial control" over the reporting company, or 

2.  Directly or indirectly own or control 25% or more of the "ownership interests" of the reporting company. 

The rules for the program provide that beneficial owners do not include: 

·     A minor child, provided the reporting company reports the required information of a parent or legal guardian of the minor child and states that the individual is the parent or legal guardian of a minor (once the minor child reaches the age of majority, the report must be updated). 

·     An individual acting as a nominee, intermediary, custodian, or agent on behalf of another individual. 

·     An employee of a reporting company, acting solely as an employee, provided that such person is not a senior officer. 

·     An individual whose only interest in a reporting company is a future interest through a right of inheritance. 

·     A creditor of a reporting company. 

What are "Company Applicants"? 

Companies created or registered before January 1, 2024, are required to report only beneficial owners. Companies created or registered on or after January 1, 2024, must report the company applicants, in addition to beneficial owners. Company applicants include: 

·     The individual who directly files the document that creates, or first registers, the reporting company; and  

·     The individual that is primarily responsible for directing or controlling the filing of the relevant document.  

What is the "FinCen Identifier"? 

An individual or reporting company may obtain a FinCEN identifier by submitting an application at or after the time that the reporting company submits its initial report. Each identifier is specific to the individual or reporting company. If an individual has obtained a FinCEN identifier, the reporting company may use that identifier in its report instead of reporting all of the required information for the individual. 

Where Can I get More Information? 

Department of the Treasury, Financial Crimes Enforcement Network (FinCen) Beneficial Ownership website: https://www.fincen.gov/boi  

Department of the Treasury, Financial Crimes Enforcement Network (FinCEN) BOIeFiling website: https://boiefiling.fincen.gov/