As we arrive at part four of our series on beneficial ownership information, we will now be answering one of your lingering questions on the topic: does my business have to report its company applicants?

In case you missed the first three articles in this series, you’ll find them here:

Now, for a quick recap of what you need to know about beneficial ownership information before we dive into company applicants.

What are BOI Reporting Companies?

Anti-money laundering regulations require certain companies to disclose the names of their beneficial owners upon request. These companies are referred to as BOI Reporting Companies.

BOI Reporting Companies

According to FinCEN, there are two types of reporting companies: domestic reporting companies and foreign reporting companies.

They explain, “A reporting company is any entity that meets the “reporting company” definition and does not qualify for an exemption. (You can find more information in our article on BOI reporting companies.)

These businesses must comply with strict regulations and provide information about company applicants to prevent the risk of illegal activity, including money laundering and terrorist financing.

That brings us to the question at hand: does your company have to report its company applicants?

Do I Have to Report My Company Applicants?

FinCEN outlines two rules for determining if a reporting company is required to report its company applicants:

  • If the domestic reporting company was created on or after January 1, 2024
  • If the foreign reporting company was first registered to do business in the United States on or after January 1, 2024

They also outline two examples of who would then, in turn, be exempt from this rule. One is that a company doesn’t need to report its company applicants if they are a domestic reporting company created prior to January 1, 2024. The other is if a foreign reporting company was first registered to do business in the United States before January 1, 2024.

Who are Company Applicants?

Each reporting company that has to report its company applicants must identify either one or two (but no more than two) company applicants. These applicants, it must be mentioned, have to be individuals, not legal entities or companies.

Further, there are also two categories of applicants: direct filers and someone who directs or controls the filing action.

1. Direct Filers

This designation refers to the individual who directly submits the paperwork initiating establishing a domestic reporting company or registering a foreign reporting company. In practical terms, this person is the one physically or electronically responsible for lodging the necessary documents with the secretary of state or comparable authority.

2. Directs or Controls the Filing Action

The second category encompasses individuals who hold primary responsibility for overseeing the submission of the creation or registration documents. Despite not being the ones physically filing the paperwork, these individuals direct or control the filing process. They, too, fall under the umbrella of company applicants, playing a crucial role in the establishment or registration procedure.

Company Applicants: FAQs

Next, let’s get into some frequently asked questions about company applicants if you still have questions left. Please refer to this FinCEN FAQ for even more information.

Could my lawyer or accountant be a company applicant?

Possibly. As of September 2023, in the context of filing documents to establish or register a reporting company, individuals such as accountants or lawyers could potentially assume the role of a company applicant. This hinges on their specific involvement in the filing process. It’s common to find company applicants working within business formation services or law firms.

An accountant or lawyer might qualify as a company applicant if they are directly responsible for submitting the paperwork that initiates the creation or registration of the reporting company. Furthermore, if multiple individuals are engaged in this filing process, an accountant or lawyer could still be considered a company applicant if they were the one primarily responsible for overseeing or directing the filing.

What defines an individual as “primarily responsible” for directing the filing of a creation or registration document?

An individual is considered “primarily responsible” for directing such a filing based on their role in decision-making regarding the filing process. This includes managing the filing, determining the document’s content, and overseeing when and where the filing occurs. The document’s signer, such as an incorporator, is not the sole determinant.

How many people need to be reported as company applicants?

At most, two individuals need to be reported:

  1. The person who directly files the document with a secretary of state or similar office.
  2. If multiple individuals take part in the filing, the one who was mainly responsible for directing or controlling the process would be reported.

If someone used an online incorporation service to file for a reporting company, who’s the company applicant?

In this case, the one who directly files the documents through the online service is the company applicant. Employees of the service who aren’t involved in the filing process aren’t considered applicants. For example, if someone uses an online service to establish their reporting company, only they are the applicant.

In the next blog post in this series, we’ll examine what information you need to provide.

Still have questions?

Contiguglia Law for Denver Business Law Help

If you have any questions or need assistance with the filing process for your company, call Contiguglia Law. Our team of experienced Denver business lawyers will guide you through the legal requirements and confirm all necessary BOI reporting forms are correctly filled out and filed. We can also assist with any other legal matters related to your business, including contracts, disputes, and more. Contact us today.

Did you learn a lot about BOI reporting company applicants in this article?

Here are three more to read next: