Your Washington business may be required to register a 'Beneficial Ownership Interest' under new federal regulations - Centralia

Ryan Endsley With Althauser Rayan Abbarno

By Ryan Endsley
Attorney with Althauser Rayan Abbarno

A new law requiring corporate entities doing business in the United States to register their Beneficial Ownership Interest (BOI) with the Financial Crimes Enforcement Network (FinCEN) of the US Department of Treasury is coming into full effect at the end of the year. Despite this, corporate and business clients I have spoken to have almost universally not even heard of the new requirement.

The new requirement began when Congress passed the Corporate Transparency Act in 2021. Among other things, the Act requires that information pertaining to corporate entities and their ownership be filed with FinCEN. The BOI Report relates to general corporate information as well as information regarding individuals who either exercise substantial control (including senior officers, individuals who can remove officers or a majority of directors, anyone who makes important decisions relating to the company’s business, finances, or structure, or has another form of substantial control) or owners with more than 25% ownership interest.

While newly registered corporations have already been impacted, the major impact on existing corporate entities comes at the end of the year. Corporate entities must file a BOI Report with the federal government in order to be in compliance with the law, regardless of what state they operate in. While there are ongoing legal challenges about the constitutionality of the law, business owners would be advised not to wait to see what happens.

Most corporate entities, whether LLCs, corporations, limited partnerships, HOAs, or other entities created by the filing of documents with the Washington Secretary of State, need to file a BOI Report unless they are an excepted entity. These exceptions include public entities, insurance companies, banks, tax-exempt entities, and inactive entities.

If you are not sure whether your corporate entity is required to file, the answer is likely to be yes. There are important deadlines to remember. First, any entities formed prior to January 1, 2024, have until the end of this year to file. Any entities formed after January 1, 2024, but before January 1, 2025, have 90 days from the date of formation to file a BOI Report. Any entities formed after January 1, 2025, have 30 days from the date of formation to file a BOI Report.

If you intend to form new corporate entities, the best policy will be to treat the BOI Report as simply an additional form that must be completed as you register your entity. Experienced corporate attorneys should be able to advise you on the dates and requirements.

Domestic US corporations must report the entity’s full legal name, any “doing business as” names, current US mailing address, and the entity’s jurisdiction of formation. With respect to each beneficial owner, the entity must provide their full legal name and forms of evidence, such as birth certificates and government-issued identification.

Lastly, BOI Reports may be submitted online to FinCEN at https://www.fincen.gov/boi. The website provides PDFs that may be submitted and direct online reporting. Any changes (e.g., change in ownership) or corrections to a BOI Report may be made at the same location. The website also provides guidance on filing, including a “Small Entity Compliance Guide.”

If you have further questions, or are uncomfortable going through this process yourself, reach out to my office or consult with any chamber member attorney listed at Chamberway.com.

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Ryan Endsley, Attorney with Althauser Rayan Abbarno in Centralia. For more information, Ryan can be reached at (360) 736-1301 or CentraliaLaw.com.