If you’re facing a situation where you don’t have all the necessary information on the beneficial owners of an entity for BOI filing, there are still steps you can take to remain compliant and minimize penalties. Regulations often account for the possibility that companies may not initially have complete information. Here’s how to handle such situations:
1. Report Known Information and Indicate Efforts to Obtain Missing Details
In many jurisdictions, if some beneficial ownership information is missing, you can still submit the filing with the information you do have, while noting the gaps. Include details such as:
Names, roles, and partial ownership information that you have
Documented steps you’ve taken to obtain the missing information
Reasons for the unavailability of certain details (e.g., unresponsive shareholders or complex ownership layers)
Transparency about your efforts demonstrates to regulators that you’re working in good faith to comply with BOI filing requirements.
2. Outline Efforts to Verify Ownership Information
To show diligence, include a record of your attempts to verify and obtain the information, such as:
Emails, calls, or letters sent to the beneficial owners
Meetings or communications with relevant stakeholders
Third-party verification attempts, if applicable
Regulators are often more lenient when you can provide evidence of a genuine attempt to comply, even if the information is incomplete.
3. Use Reasonable Assumptions in Line with Regulations
In some cases, regulations may allow you to report on beneficial owners based on reasonable assumptions, especially if complex layers obscure direct ownership. For example:
Report individuals with indirect control, even if precise ownership details aren’t fully available.
Identify any individuals exercising control through voting rights, management roles, or financial interest.
Such assumptions should align with guidelines from your regulatory body, and you may need to update or amend filings if more precise information becomes available.
4. Contact Your Regulatory Authority for Guidance
If you’ve exhausted all reasonable efforts to gather complete information, reach out to the regulatory body overseeing BOI filing in your jurisdiction. Regulatory authorities may offer:
Extensions or temporary waivers for BOI filing
Guidance on how to document incomplete or partial information
Alternative reporting methods that may apply to your case
Approaching regulators proactively signals that you’re committed to compliance and may reduce the risk of penalties or other sanctions.
5. Regularly Update Your BOI Records as Information Becomes Available
Once the initial BOI filing is submitted, plan to update your records regularly as you gather more information. Most BOI regulations require updates when ownership changes or when missing details are filled in, so schedule periodic reviews to stay compliant.
Create a timeline for follow-up on missing information.
Plan to resubmit filings if substantial information gaps are closed.
Implement a process to gather ownership information for future filings, especially if new owners join the entity.