Updating BOI Report after Changes in Beneficial Ownership

How to Update Your BOI Report After Changing Beneficial Owners

Changes in a company’s beneficial ownership structure are important events events that require careful consideration, particularly in the context of the Corporate Transparency Act and the Beneficial Ownership Information (BOI) reporting requirements.

In this article we guide you through the complexities of updating your BOI report and clarify the process and common questions associated with updating BOI reports following a change in beneficial owners.

Understanding the Need for an Update

If there are any changes to the required information about your company’s beneficial owners as documented in a previously filed BOI Report, your company must file an Updated BOI Report no later than 30 days after the date of such modifications.

Simply put, your company must file an Updated BOI report within 30 days of any change to the required information about your company’s beneficial owners in a previously filed BOI report.

A beneficial owner is an individual who either directly or indirectly:

1. Owns or controls at least 25% of the company’s ownership interests, or
2. Exercises substantial control over the reporting company

Companies are required to identify all individuals who exercise substantial control over the company AND all individuals who own or control at least 25 percent of the company. There is no limit to the number of individuals who can be reported for exercising substantial control.

An individual exercises substantial control over a reporting company if the individual meets any of four general criteria:

1. the individual is a senior officer;
2. the individual has authority to appoint or remove certain officers or a majority of directors of the reporting company;
3. the individual is an important decision-maker; or
4. the individual has any other form of substantial control over the reporting company.

An Updated BOI Report is required when there is a change in who these individuals are, who meets the ownership interest threshold of 25 percent, the death of a beneficial owner, or a minor beneficial owner who reached the age of majority.

Please note that when a beneficial owner dies, the company must file an Updated BOI Report to disclose those changes within 30 days of when the deceased beneficial owner’s estate is settled. The Updated BOI Report should identify any new beneficial owners, if appropriate.

Please note that when a beneficial owner that was a minor child reaches the age of majority, you must file an Updated BOI Report, identifying the individual as a beneficial owner and, if necessary, replacing their parent or legal guardian’s information with their own.

You must file an Updated BOI Report to disclose any change to a beneficial owner’s name, address, or unique identifying number provided in a BOI report. Further, if a beneficial owner obtained a new driver’s license or other identifying document that includes the changed name, address, or identifying number, your company must file an Updated BOI Report provide an image of the new identifying document.

Steps for Updating the BOI Report

1. Identify the Changes: Identify any changes in your company’s beneficial ownership. This includes new individuals becoming beneficial owners, existing owners changing their stakes to meet the 25% threshold, owners relinquishing their stakes, death of beneficial owners, or minor children who are beneficial owners reaching age of majority.
2. Gather Required Information: For each new beneficial owner, collect essential details such as full legal name, date of birth, residential address, and an identification number from a passport, driver’s license or state/local/tribal-issued ID together with a picture of the identification document.
3. File the Update: Submit the Updated BOI Report with Us within 30 days after the change occurs. The reporting should be comprehensive and accurate, reflecting the current ownership structure.
4. Maintain Documentation: Keep a record of the changes and the submitted update. This documentation is essential for compliance and may be required in the event of an audit.

Addressing Common Questions

• Q: What if the ownership change is temporary?
  • A: Even temporary changes in beneficial ownership should be reported. The BOI Report must always reflect the current ownership structure.
• Q: Are minor changes in ownership percentages reportable?
  • A: Any change that alters the list of individuals who meet the definition of a beneficial owner must be reported. For instance, if an individual crosses the 25% ownership threshold, this necessitates an update.
• Q: What about indirect ownership changes?
  • A: Indirect changes, such as those occurring through trusts or holding companies, also require reporting if they result in a change in the ultimate beneficial owners of the company.

Implications of Non-Compliance

Failing to update the BOI report within the mandated timeframe after a change in beneficial ownership can lead to civil or criminal penalties.

Best Practice: If there are any change to a beneficial owner’s name, address, or unique identifying number provided in a BOI report, companies should collect an image of the new identifying document reflecting the change to submit it with the Updated BOI Report.

If you need to update your BOI Report due to changes to beneficial owner information, file your Updated BOI Report with Us. Three simple steps and you are done. No login or signup required. We are the number one choice for Updated BOI Report filing.