Now that the Corporate Transparency Act has finally taken effect, many have questions about who can be a “filer” and who is liable for filing a BOI report under FinCEN’s Reporting Rule.
Some lawyers and accountants have worried that they might become liable if their clients fail to report correctly. Some corporate service providers have worried that they might be liable if they are the “company applicant” for a new entity that fails to report correctly.
The answer to the questions of “who is liable?” and “who is the filer?” can be found in FinCEN’s regulations and in its FAQs.
Who is Considered a Filer in BOI Reporting?
Section 380(g)(1) of the Reporting Rule provides that the “person” who files a BOI report may be an individual, a reporting company or another entity. In other words, the word “person” follows the legal definition which can include both human beings as well as “legal persons.” FinCEN echoed this analysis in FAQ B.8 when it wrote that “anyone whom the reporting company authorizes to act on its behalf—such as an employee, owner, or third party service provider—may file a BOI report on the reporting company’s behalf.”
Section 380(g)(3) provides that a “person provides or attempts to provide beneficial ownership information to FinCEN if such person does so directly or indirectly, including by providing such information to another person for purposes of a report or application under this section.”
Here at FinCEN Report Company, only a user who are empowered to press the button to file a BOI report (which we call a “Company Admin” or “Company Administrator”) may file a BOI report. From our perspective, therefore, the Company Admin is the individual who authorizes and files the BOI report with FinCEN.
Who is Liable for Filing a BOI Report?
Section 380(g)(4) provides that:
“a person fails to report complete or updated beneficial ownership information to FinCEN if, with respect to an entity: (i) such entity is required [by law] to report information to FinCEN, (ii) the reporting company fails to report such information to FinCEN, and (iii) such person either causes the failure, or is a senior officer of the entity at the time of the failure.”
Consequently, liability for information that was required (but not reported) rests on the reporting company’s senior officers and any person who “causes the failure.” The phrase “causes the failure” can apply to an individual who provides false information or who refuses to provide accurate information that is required in the BOI report.
FinCEN also echoes this analysis in FAQ K.3 when it explains that “an enforcement action can be brought against an individual who willfully causes a reporting company’s failure to submit complete or updated beneficial ownership information to FinCEN. This would include a beneficial owner or company applicant who willfully fails to provide required information to the reporting company.”
Conclusion
Any individual or legal person may be a “filer” of a BOI report. A person’s liability for a false or incomplete BOI report, however, will depend on whether that person was either a senior officer of the reporting company or willfully failed (or refused) to provide required information that was needed for the BOI report.
