Guidance Document - Last Updated December 20, 2024

What is a Beneficial Owner? Understanding BOIR Filing and Requirements

A beneficial owner is an individual who has significant influence or control over a company’s assets or activities. In 2024, with the Corporate Transparency Act (CTA) in effect, BOIR (Beneficial Ownership Information Report) filing is mandatory for newly established companies. This guide details the importance of identifying beneficial owners, BOIR filing requirements, and compliance essentials.

For a complete overview of the filing process, see our article on The BOIR Filing Process: A Complete Guide for 2024.

What is a Beneficial Owner?

The CTA defines a beneficial owner as someone who:

  • Owns or controls at least 25% of the company’s equity or voting rights.
  • Exercises significant control over the company’s financial or operational decisions.

This definition ensures that individuals who have a notable impact on a company’s actions are identified. By filing this information, the BOIR aims to maintain transparency, thereby reducing risks of fraud and financial misconduct.

Why is BOIR Filing Essential?

BOIR filing enables the government to trace true owners behind corporate entities. This transparency promotes accountability and deters illicit activities such as money laundering, tax evasion, and other illegal practices. Learn more about the significance of BOIR compliance in our article on BOI Reporting Violations: Fines and Penalties.

BOIR Filing Requirements

When filing a BOIR, companies must disclose essential information about each beneficial owner and company applicant. The following details are typically required:

  • Identifying Information: Full name, date of birth, residential address, and identification.
  • Ownership and Control Details: Description of the ownership interest or control exerted.
  • Verification Documents: Valid government-issued ID for verification purposes.

Ensure accuracy in all details as incorrect or incomplete filing may result in penalties. To stay informed on key filing dates, refer to our article on BOI Reporting Deadlines: Key Dates for Compliance.

Who is a Company Applicant?

A company applicant is the person who directly submits the official documents for a company’s formation or registration. In situations where multiple individuals are involved, the individual with primary control or responsibility for the filing must be reported in the BOIR.

How to Complete a BOIR Filing

Filing a BOIR requires gathering and verifying details about beneficial owners and company applicants. Here are the essential steps:

  1. Gather Documentation: Collect and verify identity documents, such as passports or driver’s licenses, from all beneficial owners and company applicants.
  2. Complete the BOIR Form: Carefully fill out all sections with the required data, ensuring consistency with official records.
  3. File Electronically: Submit the BOIR through the appropriate online portal, attaching all verification documents.

After filing, retain copies of all submitted documents for future reference. Failure to file or incorrect filing can result in financial penalties, as detailed in our BOI Reporting Violations: Fines and Penalties article.

Ready to Start Your BOIR Filing?

Begin your BOIR filing process with ease. File through our BOIR E-File System and ensure compliance with the latest requirements.

Conclusion

BOIR filing serves as a pivotal component of corporate transparency under the Corporate Transparency Act. Understanding the role of beneficial owners and the importance of accurate BOIR filing can help businesses avoid penalties and maintain compliance. For ongoing guidance and resources, explore our related posts on The BOIR Filing Process and BOI Reporting Deadlines.