The 7 Best Questions We Received During our BOI Webinar with SCORE

We recently had the opportunity to host a webinar on Beneficial Ownership Information (BOI) reporting under the Corporate Transparency Act with SCORE, the premier organization dedicated to helping entrepreneurs start and grow their businesses through mentoring and education.

SCORE’s entrepreneur members joined the webinar to learn about BOI, the new reporting requirement from the Federal Crimes Enforcement Network (FinCEN). Designed to prevent and investigate financial crimes like money laundering, BOI reporting requires business entities to keep the federal government updated on the individuals who own or substantially control those companies. For most entities, the deadline to file the initial BOI report is January 1, 2025.

SCORE’s members asked plenty of questions, some that we’d never heard before, and others that we hear time and time again from companies trying to navigate these new regulations. Here are seven of the best questions we received, which we hope will help you as you navigate the waters, too.

Keep in mind that every company is unique, so we highly recommend you consult with an attorney if you’re unsure of your obligations under BOI. What’s provided here is intended as general information, not legal advice. If you don’t have legal counsel available, you can consult with one of our legal experts to get the guidance you need.

1. I’m nervous about submitting my personal information. Is this secure? Will my BOI information be publicly accessible?

In short, yes, filing BOI is secure, and no, your information will not be accessible.

To be more specific, the government is not sharing any beneficial ownership information publicly. All of your personally identifiable information (PII) will be kept private, away from the prying eyes of the public. The objective is for FinCEN to create a private database of those who own and control business entities, and there’s no plan for this information to be published. FinCEN has even specified that Beneficial Ownership Information submitted to FinCEN is exempt from Freedom of Information Act disclosures.

Of course, cyberattacks and data breaches are always a looming threat today, and the US federal government is a common target. One thing to note is that the information you’re submitting is already stored in other government databases, especially information like names, addresses, and driver’s license numbers. FinCEN is simply asking for regular updates so that it can associate this information with business entities.
To help ease your mind, look for a BOI service provider who has acquired cybersecurity and privacy certifications, such as SOC 2 compliance. Submitting and storing your data through a certified tool helps ensure that it’s completely secure.

2. I have a single-member LLC that is considered a disregarded entity for tax purposes. Do I still need to file BOI?

We received some version of this question about a dozen times, and we can completely understand why. The simple answer is, tax status doesn’t impact BOI reporting eligibility, so you’d still have to report.

A single-member LLC (SMLLC) is required to file BOI unless otherwise exempt. This is because an SMLLC has filed a document with a secretary of state or similar office, which creates a business entity according to FinCEN’s requirements.

It’s worth noting that a business does not need to have an employer identification number (EIN) or be generating a profit to be considered a reporting company.

In short, yes, single-member LLCs are required to file unless they meet one of FinCEN’s 23 exemptions.

3. If my corporation is being dissolved, do I still need to file BOI?

The specific timeline of events will dictate the answer here, but in general, yes, corporations that are in the process of being dissolved do need to file their beneficial ownership information, unless they meet one of FinCEN’s exemption criteria.

We heard plenty of variations of this question:

• What if I haven’t conducted any business in 2024?
• What if I haven’t earned money in 2024?
• What if I’ve started dissolving my business, but haven’t finished yet?
• What if my business registration is old, but I haven’t conducted business in a number of years?
• My company was registered in 2024, but we didn’t conduct any business, and then I dissolved the company.

In short, if your business entity is or was registered with the state at any time in 2024, it is a reporting company, according to FinCEN:

“Reporting companies created or registered in 2024, no matter how quickly they cease to exist thereafter, must report their beneficial ownership information to FinCEN within 90 days of receiving actual or public notice of creation or registration.”

For those entities that have completed the process of dissolving in 2024, FinCEN also provides specific guidance on who may file the BOI report. Once the initial report has been filed for a company that no longer exists, no additional filings will be required.

If your company ceased to exist in 2023 or earlier, you do not need to file, according to FinCEN’s guidance:

“A company is not required to report its beneficial ownership information to FinCEN if it ceased to exist as a legal entity before January 1, 2024, meaning that it entirely completed the process of formally and irrevocably dissolving. A company that ceased to exist as a legal entity before the beneficial ownership information reporting requirements became effective January 1, 2024, was never subject to the reporting requirements and thus is not required to report its beneficial ownership information to FinCEN.”

It is vital that you confirm your legal registration status and ensure that your dissolution process was completed in order to avoid potential penalties. We recommend working with your legal counsel to do this.
If you need assistance winding down your business, we also offer assistance with the dissolution process.

4. I started my business this year, but I didn’t know about the BOI requirements, so I missed the 90 day deadline. Will I get fined?

In a meeting with FinCEN in September, we were told directly that they had not yet penalized anyone for late or missing BOI reports, so we know they haven’t yet begun that process. Our simplest advice is, if you’ve determined that you need to file, do so as soon as possible. Waiting only opens you up to further liability.

The best thing you can do is file now and be sure to meet any future deadlines when you have to file updated reports. 
If you’re planning to create new entities in the future, Harbor Compliance also offers LLC formation assistance, including filing services for updated BOI filings to keep you up to date.

5. What is a FinCEN ID and how do I get one?

FinCEN sets a clear definition of what a FinCEN identifier is:

“A “FinCEN identifier” is a unique identifying number that FinCEN will issue to an individual or reporting company upon request after the individual or reporting company provides certain information to FinCEN. An individual or reporting company may only receive one FinCEN identifier.”

Importantly, reporting companies and individuals are not required to obtain a FinCEN ID. It’s completely optional. However, a FinCEN ID can be convenient, especially for companies that change ownership information frequently and may have to submit multiple amended reports each year. That’s because you can use a FinCEN ID in place of certain personally identifying information on your report filings, saving you time and effort.

Individuals may request a FinCEN ID at any time directly from FinCEN’s website. Reporting companies may request an identifier directly at the end of the BOI filing process by simply checking a box. Once the BOI report is submitted, the company will immediately receive its unique identification number. This can be done as part of the initial filing, or as part of any subsequent updated or corrected filing.

A FinCEN ID can help minimize the amount of time spent reentering personal information. Harbor Compliance’s BOI Reporting Service also allows you to store and reuse information for subsequent filings without having to reenter it every time.

6. This seems pretty simple. Why does FinCEN say it will take up to three hours?

The amount of time spent on BOI filing can vary widely from company to company. It can depend on a number of factors, including how many beneficial owners you have, whether your company is a subsidiary (or has subsidiaries), and how many separate legal entities you might have across states.

FinCEN’s estimate is just that—an estimate, and it mainly accounts for the actual time spent filling out the information. Collecting the information can take a whole lot longer. Just weeks ago, Harbor Compliance met with FinCEN’s team that leads the BOI initiative, and we were told that they’ve seen companies take an average of two to four months to collect all of the necessary information for their filing. While that may seem like an outrageous amount of time, think about all of the information you may need to gather:

• Legal names
• Addresses
• Dates of birth
• Identifying numbers from government-issued documents
• Legal entity names
• Trade names, such as d/b/a or t/a
• Jurisdictions of formation
• Business addresses
• Taxpayer Identification Numbers

You’ll have to do this for every entity and beneficial owner, so it can take quite a lot of time, especially in larger or more complex companies.

For some companies, yes, it may be a simple process, but for many others it can be cumbersome and time-consuming. That is why reporting companies should get started immediately and may want to consider service providers to handle their reporting.

 7. I operate a joint business with a minor under 18 years old. Do I need to report their information as a beneficial owner?

According to FinCEN, minors are not considered beneficial owners for the purposes of BOI filing. In the Small Entity Compliance Guide, FinCEN outlines a specific exception for minor children, saying that if,

“The individual is a minor child, as defined under the law of the State or Indian tribe in which the domestic reporting company is created or the foreign reporting company is first registered,”

then the reporting company may instead report the information of the child’s parent or legal guardian.

It’s essential to note that a parent or guardian’s information must be reported in lieu of the child’s, even if the parent or guardian is not otherwise involved in the business or would not qualify as a beneficial owner on their own.

It’s also important to remember that once the child reaches the legal age of majority, they will have to file an updated BOI report that provides their own information.

If you have questions about whether your child should be listed as a beneficial owner, we highly recommend consulting legal counsel, who can provide specific guidance for your individual situation.

Still have questions?

We received dozens of great questions during our webinar, but we simply don’t have room here to dive into all of them. If you have more questions for us, or want to learn more about how BOI requirements apply to your business, we recommend registering for our upcoming webinar, A Guide to Beneficial Ownership Information Reporting. This webinar is also eligible for continuing education credit through Earmark.