FinCEN’s BOI Report: A Quick Insights into Company Applicants
Understand the critical aspects of Company Applicants of a Reporting Company- check out this guide.
Understanding the “Company Applicants” concept when reporting to FinCEN (Financial Crime Enforcement Network) is essential. This understanding is crucial to ensuring that your business meets FinCEN’s requirements seamlessly. It is vital to know who qualifies as a company applicant and the minimum and maximum reporting limits to avoid any compliance issues.
In this week’s “BOI Reporting series,” we will explore what a company applicant is, its reporting requirements, and why businesses must identify and report applicants accurately. Let’s work together to guide you through the intricacies of FinCEN reporting and ensure your company’s compliance.
Who is defined as a company applicant in a reporting company?
Company applicants are the individuals who are responsible for filing the documents to create or register the reporting company with the state jurisdiction, Indian tribes, or the U.S. jurisdiction.
According to the “FinCEN rule” of the reporting company, every company formed or established on or after January 1, 2024, will have to identify its company applicants and report to FinCEN with at least one company applicant and, at most, two persons. The company applicant must be an individual. Legal entities or organizations do not qualify as company applicants in a reporting company.
Which companies are needed to report company applicants?
Reporting companies are only required to report their company applicants to FinCEN if certain conditions are met:
- A domestic reporting company created or registered on or after January 1, 2024, is required to report its company applicant (or)
- A foreign reporting company registered to do business in the United States on or after January 1, 2024, is required to report its company applicant.
Note: Reporting companies are not required to report their company applicants to FinCEN if certain conditions are met:
- A domestic reporting company created before January 1, 2024, or
- A foreign reporting company registered for business in the United States before January 1, 2024.
Two Categories of Company Applicants
According to FinCEN, company applicants are classified into two categories, they are:
- Direct filer: In the first category, the individual is responsible for directly filling out the documents required to register domestic or foreign reporting companies with the Secretary of State or a similar office, whether on paper or online.
Example: Let’s assume that John is the sole company applicant and is responsible for filing the required documents to create or register his leather manufacturing company with the state jurisdiction or Indian tribes. Since he is the only person involved in the filing process, he is also the direct filler to his company. He must file the papers physically or electronically.
In this situation, John is considered as a company applicant. Therefore, John’s details must be reported as the company applicant for his leather manufacturing company.
- Directs or controls the filing action: The second category of company applicants, known as directing or controlling the filing action, may not apply to all reporting companies with a reporting requirement. However, if multiple individuals are involved in filing out the documents that created or first registered the company, the second category is required, and they should report the requirement. It’s interesting to learn that this person is also known as the company applicant, even though they are not supposed to file the documents directly with the Secretary of State or a similar office.
Example: Let’s consider that Mr. William is responsible for preparing the necessary documents to create the reporting company. He directs or controls the filing action. On the other hand, Mr. James is the individual who directly filed the documents with the Secretary of State or a similar office. Both are partners in this reporting company,
In this scenario, Mr. William and Mr. James are considered company applicants. Mr. William is primarily responsible for directing or controlling the filing action, and Mr. James directly filed the documents. Therefore, both are considered company applicants. However, it’s important to note that state or tribal employees who process such documents cannot be considered company applicants.
What information is required from the company applicant for BOI filing?
The reporting company qualifies as the category to submit the details of their company applicants for BOI filing, the below-mentioned information needs to be provided:
- Full Legal Name
- Date of Birth
- Address (the person who creates or registers the papers of the reporting company must report their business street address instead of their residential address)
- Unique identifying number, issuing jurisdiction from, and image of an acceptable identification document (which includes a State Driving license, U.S. passport, identification document issued by a state, local government, tribe, or foreign passport),
The following information is required from the company applicant. Suppose the company applicant has already obtained the FinCEN identifier, he can provide it instead of reporting all the information.
What is a FinCEN identifier?
The “FinCEN identifier” is a unique identification number issued by FinCEN to individuals or reporting companies. A unique identification number will be provided once the required details are reported to FinCEN.
Only individuals or reporting companies can obtain a FinCEN identifier. When a company applicant has a FinCEN identifier, they can report it instead of providing personal information such as legal name and date of birth on the beneficial ownership information report. There is no requirement to obtain the FinCEN identifier, but it’s worth considering since it can streamline the reporting process.
How to obtain the FinCEN identifier?
Starting January 1, 2024, an individual can request a FinCEN identifier from FinCEN. To obtain the FinCEN identifier,
- Go to the official website of FinCEN https://fincenid.fincen.gov.
- Enter your required information in the fields such as full legal name, date of birth, address (If the company applicant creates or registers the documents to the reporting company, should report their business street address. Otherwise, enter the residential address), identification document (State Driving license, U.S passport)issued by the state, local government, tribe.
Once all the required information has been submitted to FinCEN, the individual will receive their unique FinCEN identifier immediately.
Companies that are required to report Beneficial Ownership Information can request a FinCEN identifier by selecting a checkbox during submission. Once the report is submitted, the company will receive a unique FinCEN identifier immediately. If a reporting company needs to request a FinCEN identifier after submitting its initial beneficial ownership report, it can submit an updated report solely for that purpose, even if the company does not need to update any other information.
Note: If the information needs to be changed or updated, go to your account and then enter the updated or corrected information, but the FinCEN ID will not be changed.
Meet your BOI Reporting with TaxBandits
Our previous series discussed the beneficial owner information in a reporting company. Understanding the concept of company applicants is crucial when it comes to reporting to FinCEN. By following the above guidelines, businesses can ensure their compliance and avoid any legal consequences. Also, this helps the company easily determine the company applicants. After identifying the company applicant, you requested that the BOI report be submitted to FinCEN.
Nothing to worry about while stepping into the BOI reporting process. TaxBandits provides a seamless solution for filing BOI reports. Our user-friendly software comes with a range of features that make it easy for you to prepare and submit your report without any complications. You can also receive instant updates on the status of your BOI report through our optimized software.
Stay connected with us to receive the latest information about BOI reporting requirements in the upcoming weeks.
