In previous blog posts, we've addressed the immediate changes taking effect in January of 2024. The Corporate Transparency Act (CTA) not only alters the process of establishing a new business entity, it also mandates that Beneficial Ownership Information (BOI) remains accurate at all times. As a result, there are specific actions that all beneficial owners must take to avoid fines and penalties.
What are the potential reasons for updating BOI information?
There are few circumstances that would necessitate a BOI update, but it is crucial to bear them in mind:
- If previously reported information changes.
- If previously reported information is incorrect or erroneous.
- If your company becomes an exempt reporting company after submitting an initial BOI report.
All of these scenarios indicate a requirement to file an updated BOI report no later than 30 days after the date on which the change occurred. It is important to clarify that the above details do not pertain to company applicant information. Reporting companies are not obligated to submit an update for changes related to their company applicant information.
Example Updates
Examples of events that would require updated reporting include any changes to the information provided in the initial or previously filed BOI report. This includes adjustments to the reporting company's information, modifications in beneficial ownership, and alterations to a beneficial owner's name, address, or unique identifying number. Specific examples of updates are as follows:
- Any modification to the data submitted for the reporting company, such as adding a new DBA.
- A shift in the beneficial owners, like a new CEO, a sale that results in a new owner who meets the 25% ownership interest threshold, or a beneficial owner's passing.
- Any modification to the name, address, or unique identification number of a beneficial owner as listed in a BOI report.
These examples are sourced from page 45 of FinCEN's Small Entity Compliance Guide, which offers further details on the rules, and provides additional clarity on the examples. For information related to your specific situation, it is advisable to seek guidance from your attorney and refer to the Small Entity Compliance Guide.
Where can I update my information?
To update information in your BOI report, you can use the portal on FinCEN's website beginning January 1, 2024. There is a 30-day grace period to file the necessary updates. According to FinCEN's Small Entity Compliance Guide, there are no penalties for inaccurate BOI reports if they are corrected within 90 calendar days of filing.
Be sure to visit the CLAS CTA Reference Center for practical information about the CTA, FAQs, educational videos, guest blogs from corporate attorneys, and much more!
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About the authors
Ray Barr is an independent writer and video editor who is presently pursuing a Master of Fine Arts in Creative Writing at The New School. He completed his undergraduate studies in Classical Civilizations at The University of Richmond, where he also explored various disciplines such as History, Anthropology, Environmental Science, and Economics within the framework of a liberal arts education. Ray’s work has been featured in The Messenger literary magazine, and he was honored with The Margaret Owen Finck Award for Creative Writing for his outstanding piece titled “What’s Cooking”.
Keith Sheppard a Business Development Manager at United Corporate Services, holds a Bachelor of Science degree in Paralegal Studies from St. John's University. With an extensive career spanning over 27 years in the legal services industry, Keith has held various managerial roles, including Client Service Representative and Corporate Paralegal Manager. His wealth of experience enables him to offer valuable perspectives on effectively navigating the intricacies of corporate filing and uniform commercial code transactions.
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