Beneficial Ownership Info Reporting FinCEN requirement?

[Zona]

Is anyone here self-employed (or formerly self-employed) and dealing with this requirement? (For reference, see: https://www.fincen.gov/boi) Both DH and I are now retired but at some point in the past we have each had our own single-member LLCs for software consulting.

My LLC still exists with with our state's corporation commission (I never officially dissolved it although my last operating year where I had 1099 consulting income was 2018), but I do not have any financial assets, bank accounts, or credit cards titled with the business. I do still get plenty of junk mail addressed to it though.

DHs LLC is also still on the books with the corporation commission and he does have a checking account with a small balance of 3K that hasn't been used in years. The 3k that is in there is just the minimum balance to keep the account open. His last operating year where he had 1099 consulting income was also 2018.

I kept hearing/reading about the Beneficial Ownership Information Reporting aspect of the Corporate Transparency Act and wondered if it is something we would be required to report if neither LLC is actively gaining income? It is not clear to me if this would be a one-time filing requirement or if it would be ongoing. We don't plan on doing any more consulting work but weren't 100% ready to dissolve these companies just in case we ever had to go back to work again. However, if the new law requires us to file some busywork paperwork every year from now on, we may begin dissolving them. We are trying to simplify our finance picture in retirement, not complicate it.

Would love to hear what other people in similar situations have done/are planning to do.

Apologies if this has been asked and answered elsewhere on the forum - I did not see any posts using the search terms in my post title above.

 

[Lewis Clark]

This also is likely to apply to HOA board members.

A few weeks ago, a judge ruled the Corporate Transparency Act unconstitutional. It will be interesting to see how this plays out.

 

[perez99]

Here is the FinCen page in case it helps.

I'm not 100% sure, but under the impression that this is, at this point, a 1 time event to report who owns the LLC. Thinking that if ownership changes, it will trigger another reporting.
I believe income is not a factor in reporting or not. If the LLC is active, a report is required. Corrected. See below

Due to the court decision, the plaintiffs are not required to report at this time. Anyone else is still required to meet deadlines.

I have to report my LLC. Have not done it yet, but seems to be a fairly easy process (at least for now).

 

[perez99]

Actually I just looked at the FAQ section.

2. What are the criteria for the inactive entity exemption from the beneficial ownership information reporting requirement?

An entity qualifies for the inactive entity exemption if all six of the following criteria apply:

(1) The entity was in existence on or before January 1, 2020.
(2) The entity is not engaged in active business.
(3) The entity is not owned by a foreign person, whether directly or indirectly, wholly or partially. “Foreign person” means a person who is not a United States person. A United States person is defined in section 7701(a)(30) of the Internal Revenue Code of 1986 as a citizen or resident of the United States, domestic partnership and corporation, and other estates and trusts.
(4) The entity has not experienced any change in ownership in the preceding twelve-month period.
(5) The entity has not sent or received any funds in an amount greater than $1,000, either directly or through any financial account in which the entity or any affiliate of the entity had an interest, in the preceding twelve-month period.
(6) The entity does not otherwise hold any kind or type of assets, whether in the United States or abroad, including any ownership interest in any corporation, limited liability company, or other similar entity.
FinCEN’s Small Entity Compliance Guide includes checklists for this exemption (see exemption #23) and for the additional exemptions to the reporting requirements (see Chapter 1.2, “Is my company exempt from the reporting requirements?”).

[Issued September 18, 2023]

 

[Zona]

An entity qualifies for the inactive entity exemption if all six of the following criteria apply:
....
(5) The entity has not sent or received any funds in an amount greater than $1,000, either directly or through any financial account in which the entity or any affiliate of the entity had an interest, in the preceding twelve-month period.
(6) The entity does not otherwise hold any kind or type of assets, whether in the United States or abroad, including any ownership interest in any corporation, limited liability company, or other similar entity.
....

Thanks Perez99 for this summary, I did read through all the FAQs but #6 confused me as it applied to DHs LLC. I felt pretty sure my LLC met all of the exception criteria, but DHs business checking account seemed to conflict with these exceptions since a checking account is a "kind or type of asset" and we have moved money out of it in the past year (not business payment transactions, just moved excess cash over the minimum balance to our personal account). If it's a one-time filing that is not too onerous, I'd be okay with that with that to keep our options to go back to w*rk open if needed.

 

[Closet_Gamer]

I had to do this for the LLC that owns our rental property. I also did it for an LLC I maintain for consulting.

It’s not difficult or that intrusive. Just takes some time and jumping thru various login/set-up-an-account hoops. One more government thing to track.

 

[nvestysly]

It's time to resurrect this thread and continue the discussion. The court case(s) decided in the first half of 2024 may not apply to all LLC's. However, the December 3, 2024 injunction granted in Texas Chop Shop v Garland apparently does apply to all businesses that were required to file Beneficial Ownership Information. There are many YouTube videos and web site references to the injunction and I've linked one below. In addition, I've attached a copy of the decision as a PDF and included a few excerpts below.

I am not a lawyer - if the BOI filing applied to you, please check with an attorney to determine your next steps.

"... and reporting companies need not comply with the CTA’s January 1, 2025, BOI reporting deadline pending further order of the Court."

"It is therefore ORDERED that Plaintiffs’ Motion for Preliminary Injunction (Dkt. #6) is hereby GRANTED. IT IS SO ORDERED."

 

[Zona]

Interesting. Thanks Nvestysly for posting the update. Earlier this year we just went ahead and filled out the form for both of our LLCs. I guess we didn't need to after all. Hopefully none of this has an impact for us in the long run...we are both retired and hope to stay that way!