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In light of a recent federal court order, US-based reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, this court order is not a final determination and has been appealed by the Department of Treasury. Reporting companies may continue to voluntarily submit beneficial ownership information reports.
This article provides a brief summary of what freelancers need to know about BOI reporting under the CTA.
Who has to file a BOI report?
Every LLC, corporation, or other entity that was created by filing a document with a secretary of state or equivalent office is not currently required to file a BOI report unless it qualifies for one of the CTA’s exemptions, which we detail here.
Are companies owned by freelancers exempt?
There is no specific exemption for companies owned by freelancers, gig-workers or consultants. Most of the exemptions are for entities that already file reports with government agencies that list beneficial owners, such as publicly traded companies, or industries already subject to substantial government regulation like banks and insurance companies. The main thing freelancers should pay attention to when determining if their entity needs to file a BOI report is the type of business they have (to see if their entity qualifies for an exemption) and if it was created by filing a document with the secretary of state of similar office.
Who is a beneficial owner?
A beneficial owner is an individual who directly or indirectly exercises substantial control over the company or who owns or controls at least 25 percent of its ownership interests.
What information about beneficial owners has to be reported?
The following current information has to be reported about each of the company’s beneficial owners:
- legal name
- birthdate
- residential address
- unique number and issuing jurisdiction from a passport, driver’s license, or state ID, and an image of the document.
The report must also provide certain information about the company, and for companies created in 2024 and beyond, information about their company applicants.
When do BOI reports have to be filed?
A company that existed before January 1, 2024 may choose to file its initial BOI report by January 1, 2025.
Where are BOI reports filed?
All BOI reports are filed with FinCEN. FinCEN allows BOI reports to be filed via select third-party providers, like Wolters Kluwer. With Wolters Kluwer, you have access to benefits and features that aren’t available on FinCEN’s portal, like being able to file from your mobile device, to track filings and update them as time goes on, and to invite beneficial owners via text or email to add in their information. These features, and more, are available in Wolters Kluwer’s BizFilings BOI Reporting tool.
What are the potential penalties for not filing?
There are not currently any penalties for failing to file complete, initial, updated, and corrected BOI reports.
Where can I get more information about BOI reporting?
Wolters Kluwer BizFilings has helpful resources on BOI, including an eligibility quiz, short explainer videos and FAQs, which can all be found on our Braintrust-exclusive resource page.
