{"id":3344,"date":"2024-01-26T12:47:09","date_gmt":"2024-01-26T20:47:09","guid":{"rendered":"https:\/\/foundrylawgroup.com\/?p=3344"},"modified":"2024-01-26T12:48:25","modified_gmt":"2024-01-26T20:48:25","slug":"what-companies-hold-exempt-status-under-new-beneficial-ownership-reporting-rules","status":"publish","type":"post","link":"https:\/\/foundrylawgroup.com\/what-companies-hold-exempt-status-under-new-beneficial-ownership-reporting-rules\/","title":{"rendered":"What Companies Hold Exempt Status Under New Beneficial Ownership Reporting Rules?"},"content":{"rendered":"<p>The U.S. Department of the Treasury\u2019s Financial Crimes Enforcement Network (FinCEN) recently issued a new reporting rule. The rule is the <a href=\"https:\/\/www.fincen.gov\/boi\">Beneficial Ownership \u201cReporting Rule.\u201d<\/a> It went into effect on January 1, 2024 and it directly affects some small businesses. Our firm has run a series of posts on the new rule over the past few months. We would like to add one more on who is exempt from reporting.<\/p>\n<h2><strong>What Companies Are Exempt?<\/strong><\/h2>\n<p>There are 23 different types of businesses that are exempt from FinCEN\u2019s reporting requirements. Examples include:<\/p>\n<ul>\n<li>Public companies,<\/li>\n<li>Banks,<\/li>\n<li>Securities brokers and dealers,<\/li>\n<li>Insurance companies,<\/li>\n<li>Registered investment companies and advisors, and<\/li>\n<li>Pooled investment companies.<\/li>\n<\/ul>\n<p>Also exempt are:<\/p>\n<ul>\n<li>Tax-exempt entities,<\/li>\n<li>Wholly owned subsidiaries of certain exempt companies,<\/li>\n<li>Inactive entities, and<\/li>\n<li>Large operating companies.<\/li>\n<\/ul>\n<h2><strong>What About Nonprofits?<\/strong><\/h2>\n<p>As stated above, tax-exempt entities are exempt from reporting under the new FinCEN rule. This essentially means that public charities, private foundations, and other nonprofits with IRS income tax exemption status don\u2019t have to file a BOI report to FinCEN.<\/p>\n<p>The reasoning for the exemption makes sense. A key component to a BOI report is that a company must disclose its \u201cbeneficial owners.\u201d However, nonprofit organizations do not have owners at all. With no owners, a nonprofit\u2019s report would be quite bare.<\/p>\n<h2><strong>What About Sole Proprietorships?<\/strong><\/h2>\n<p>Sole proprietors are generally exempt from reporting. The new FinCEN rule directly impacts any entity created by filing business formation documents with a secretary of state or a similar office. However, a sole proprietor does not have to file any documents with a secretary of state or similar office to create or register his or her business. Thus, the business is not subject to reporting.<\/p>\n<h2><strong>Are There Resources to Learn More?<\/strong><\/h2>\n<p>Yes. We recommend the following:<\/p>\n<ul>\n<li>More information regarding the Reporting Rule can be found at <a href=\"www.fincen.gov\/boi\">fincen.gov\/boi<\/a>.<\/li>\n<li>FinCEN has issued some FAQs on specific issues and topics. You can find them here: <a href=\"www.fincen.gov\/boi-faqs\">fincen.gov\/boi-faqs<\/a>.<\/li>\n<li>Keep an eye out for additional blog posts from the Foundry Law Group that go into more detail regarding the reporting requirements.<\/li>\n<\/ul>\n<h2><strong>Still More Questions? <\/strong><\/h2>\n<h2><strong>Foundry Law Group Is Here to Help!<\/strong><\/h2>\n<p>The attorneys at <a href=\"https:\/\/foundrylawgroup.com\/seattle-bellevue-law\/\">Foundry Law Group<\/a> have years of experience in helping businesses form, manage, and protect themselves from risks and concerns. Our team follows the latest developments affecting our clients\u2019 operations, and we apply that knowledge as we build proactive strategies for long-term solutions. We are always here to help so make sure to contact our talented team now!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The U.S. Department of the Treasury\u2019s Financial Crimes Enforcement Network (FinCEN) recently issued a new reporting rule. The rule is the Beneficial Ownership \u201cReporting Rule.\u201d It went into effect on January 1, 2024 and it directly affects some small businesses. Our firm has run a series of posts on the new rule over the past [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[687,725,621],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What Companies Hold Exempt Status Under New Beneficial Ownership Reporting Rules? - Foundry Law Group<\/title>\n<meta name=\"description\" content=\"The Foundry Law Group has years of experience helping businesses form, manage, and protect themselves from risks and concerns. 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