What is a BOI Report and Who Is Considered a Beneficial Owner?
In order to comply with the Federal Corporate Transparency Act (CTA), your company will need to file what’s called a BOI Report. BOI stands for Beneficial Owner Information. Your company’s BOI report will need to identify each of your beneficial owners.
Determining Your Beneficial Owners
A “beneficial owner” of your company is any individual who, directly or indirectly, either:
(a) exercises substantial control over your company or
(b) owns or controls at least 25 percent of the ownership interests in your company.
An individual “exercises substantial control over the reporting company” if that individual:
- Is a senior officer of the reporting company (defined to include any president, chief executive officer, chief operating officer, chief financial officer or general counsel);
- Has the power to appoint or remove (i) any senior officer, or (ii) a majority of the board of directors (or similar body) of the reporting company;
- Has “substantial influence over important decisions”; or
- Has any other form of substantial control over the reporting company.
Determining beneficial ownership will require you to apply FinCEN’s rules for calculating ownership percentage and key definitions involving “substantial control.” If your company’s governance structures are complex, you may need the help of an attorney.
