Beneficial Ownership Information Report

A beneficial owner is an individual who, whether directly or indirectly, exerts substantial authority over the reporting company, or holds or governs an ownership stake of at least 25% of the company.

If the individual fits into any of the specified categories, they are deemed to be exercising substantial control. These categories include being a senior officer, such as the president, chief financial officer, general counsel, chief executive officer, chief operating officer, or any comparable role. Additionally, if the individual possesses the power to appoint or dismiss specific officers or a majority of directors of the reporting company, they are considered to be exerting substantial control. Furthermore, if the individual serves as a pivotal decision-maker for the reporting company, they are considered to have substantial control.

The interim final rule recently issued by FinCEN significantly narrows the scope of beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act. It exempts all domestic entities and US persons who are beneficial owners of foreign reporting companies from BOI reporting obligations. Only foreign entities registered to do business in the US must now report BOI, but they are not required to report US persons as beneficial owners. The rule extends the reporting deadline for foreign entities to 30 days after publication or 30 days after registering to do business in the US, whichever is later. More information is available on FinCEN’s website at https://www.fincen.gov/boi.