FinCEN Beneficial Ownership Rule

Banner stating that Advanta IRA has an important announcement regarding new legislation.

New legislation that affects any LLC, corporation, or other entities you or your retirement plan own.

In 2021, Congress passed the Corporate Transparency Act (CTA), which requires most U.S. businesses (and some foreign businesses) to report information each year on the owners and members of those businesses. Since that legislation was passed, the Financial Crimes Enforcement Network (FinCEN) has worked to adopt the rules to implement this new law, and these implementations became effective on January 1, 2024.

FinCEN Beneficial Ownership Rule

From Advanta IRA’s reading of the new law, any checkbook LLC or corporation owned by an IRA, HSA, or other retirement plan IS REQUIRED to file this Beneficial Ownership Information (BOI) report. The entities’ managers, managing members, general partners, or presidents are responsible for filing the appropriate reports and/or determining if any reporting exemptions apply to their entity.

Please note: Advanta IRA will NOT be filing these BOI reports for any LLCs, corporations, or other entities owned by your retirement plan, nor can we provide any advice for filing them. If you need assistance, please contact an attorney or CPA.

What is a Beneficial Owner?

Per the BOI rule, a beneficial owner is any individual who controls or owns 25% or more of a reporting company or directly or indirectly exercises substantial control over a reporting company.

What is a company applicant? *

If a reporting company was created on or after January 1, 2024, it is required to identify and report at least one and no more than two company applicants. They are defined as:

  1. The individual who directly files the document that creates or registers the company; and
  2. If more than one person is involved in the filing, the individual who is primarily responsible for directing or controlling the filing.

Note: If the reporting company was formed before January 1, 2024, they do not need to report their company applicants.

When does the BOI form need to be submitted?

Per this new law, any reporting company (LLC, corporation, limited partnerships, etc.) must file its initial BOI based on the following timing:

  • Created or registered before January 1, 2024  – the BOI report must be filed by January 1, 2025.
  • Created in 2024 – the BOI report must be filed within 90 calendar days of creation.
  • Created on January 1, 2025, or later – the BOI report must be filed within 30 calendar days.

Note: If there are changes to the company or beneficial owner information (i.e., beneficial owners’ identities), or if the company becomes aware of an inaccuracy in a previously filed BOI report, the company must submit an updated BOI report within 30 days of the change or discovery.

What information is needed to submit a BOI?

  • Company information – complete legal name (along with any trade names), address, jurisdiction of formation, and taxpayer identification number (TIN) or its equivalent issued by a foreign jurisdiction.
  • Beneficial owner information – full legal name, date of birth, address, unique identification number, and image of a U.S. passport, state driver’s license, or other eligible identification document for each individual recognized as a beneficial owner. In the case of an IRA LLC, the beneficial owner is the IRA account holder.
  • Company applicant information – for companies established or registered on or after January 1, 2024, the same set of information required for beneficial owners applies to the company applicant.

How is the information submitted?

  • BOI reports are submitted through FinCEN’s Beneficial Ownership Secure System (BOSS).

What are the penalties if a reporting company does not report BOI to FinCEN?

Per the Corporate Transparency Act, a person who willfully provides or attempts to provide false or fraudulent data to FinCEN or who willfully fails to report BOI data to FinCEN may be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000.

Because this is a new law, FinCEN will allow you to correct a mistake or omission within 90 days of the deadline for the original report without being penalized.

How can I find out more information?

To find out more about this new law, the reporting requirements, and exemptions, please visit:

* https://www.fincen.gov/boi-faqs#E_1