How to File a Beneficial Ownership Information Report (BOIR) for Your Business ? ( from India )
Yes, if you have a Subsidiary in US, or a Joint Venture, remember to file this.
Yes, You have to file, even if you have any Shares in USA, and you are holding on behalf of somebody else… So, Just like Indian Government MCA wants you to file the BEN-1 and BEN-2… the US Government has also learned this from our Indian Transparency systems. Just like we have KYC, Know your Customer norms in India, Now US has also started the BOIR form on similar level in USA, for anybody who has shares in a US Company.
Compiled for CA Students in India : Deepanshu Gupta, CA Final, 2nd year, at MLG Associates, Faridabad,
Supported by Jasleen Kaur
Who are required to file BOIR form?
Not all companies are required to report BOI to Financial Crimes Enforcement Network (FinCEN) under the Reporting Rule. Companies are required to report only if they meet the Reporting Rule’s definition of a “reporting company”.
Which entity is a Reporting Entity ?
A “Reporting Company” for BOIR (Beneficial Ownership Information Reporting) refers to any legal entity that is required to file information about its beneficial owners with the Financial Crimes Enforcement Network (FinCEN), typically including corporations, limited liability companies (LLCs), limited partnerships (LPs), and other entities formed by filing documents with a Secretary of State’s office in the United States.
Key points about reporting companies for BOIR
FinCEN determines which entities are considered as “reporting companies” under the Corporate Transparency Act.
This includes details about the company’s beneficial owners, such as their full names, dates of birth, addresses, and identifying document numbers.
Companies created or registered on or after January 1, 2024, must file their initial BOIR within 30 days of formation, while companies formed before that date have a deadline to file by January 1, 2025.
EXEMPTIONS
The Reporting Rule specifies twenty-three (23) specific types of entities which are exempt to file BOIR form are as follows-
Securities reporting issuer
Governmental Authority
Bank
Credit union
Depository institution holding companies
money services business
Broker or dealer in securities
Securities exchange or clearing agency
Other Exchange Act registered entity
Investment company or investment adviser
Venture capital fund adviser
Insurance company
State-licensed insurance producer
Commodity Exchange Act registered entity
Accounting firm
Public utility
Financial market utility
Pooled investment vehicle
Tax-exempt entity
Entity assisting a Tax-exempt entity
Large operating company
Subsidiary of certain exempt entities
Inactive entity
Now,
If your company is a reporting company, your next step is to identify its beneficial owners.
A beneficial owner is any individual who, directly or indirectly:
• Exercises substantial control over a reporting company;
OR
• Owns or controls at least 25 percent of the ownership interests of a reporting company.
Lets understand terms used above-
SUBSTANTIAL CONTROL
The Individual is a senior offiicer.
The Individual has the authority to appoint or remove majority of Directors of Reporting Company.
The Individual is a Important Decision Maker.
The Individual has any other form of Substantial control over Reporting Company.
OWNERSHIP INTEREST
Holds Equity, stock, voting right, profit interest, convertible instruments, options, or other mechanism used to establish ownership.
Any other instrument, contract or other mechanism used to establish ownership.
BOIR’S Deadline
The deadline for submitting a BOIR depends upon when the reporting company was created or registered to do business in the United States.If the reporting company identifies an inaccuracy in a BOIR that the reporting company filed, the reporting company must correct it no later than 30 days after the date the reporting company became aware of the inaccuracy or had reason to know of it.
What are the penalties for violating BOIR Requirements?
FinCEN imposes two types of penalties:
- Civil penalties: Businesses failing to file on time or providing incorrect information will be imposed a penalty of range up to $591 per day.
- Criminal penalties: Criminal penalties will be imposed for wilful failure or providing fraudulent information with the FinCEN. Criminal penalties for non-compliance may include fines up to $10,000 or imprisonment for up to two years.
sources :
US Govt Site : https://boiefiling.fincen.gov/fileboir
In the service of the Growing Indian Middle level MSME’s
The mini MNC’s from India….
Come’on world…. we are coming
contact the author at click here