Boi

[rwm221]

I am beginning to get calls from my business clients asking if they need to file a BOI. Most of my business clients are Sole Proprietorship LLC's. I've read that LLC's need to file BOI, but also that Sole Proprietorship do not. I also read where some states are fighting this. I am wondering what anyone else is telling their clients. Thank You

[terryats]

This is from Fincen. Link. chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://fincen.gov/sites/default/files/shared/BOI-Informational-Brochure-April-2024.pdf

Who Has to Report? Companies required to report are called reporting companies. Reporting companies may have to obtain information from their beneficial owners and report that information to FinCEN. Your company may need to report information about its beneficial owners if it is: 1. 2. a corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or a foreign company and was registered to do business in any U.S. state or Indian tribe by such a filing.

[rwm221]

The reason I asked is because I found this information online.
" In general, sole proprietorships and partnerships are not required to file a BOI report because in most states they are not created by the filing of a document with the Secretary of State (or equivalent office). In addition, a business does not have to file because of activities such as obtaining an EIN, registering a fictitious business name, or obtaining a business license (whether general, professional, or occupational). None of these activities result in the creation of a new entity."

[Uncle Sam]

Perhaps this link can clear up your thinking on this subject:

https://www.fincen.gov/beneficial-ownership-information-reporting-rule-fact-sheet

[TaxGuyBill]

because in most states they are not created by the filing of a document with the Secretary of State ... None of these activities result in the creation of a new entity."

Correct, a non-LLC sole proprietorship is not created by filing a document and would not need to file BOI. But a LLC *IS* creating a new entity (by filing a document with the Secretary of State), even if it is taxed as a Sole Proprietorship and therefore DOES need to file BOI (unless it meets one of the exceptions).

[Rapid Robert]

I've read that LLC's need to file BOI, but also that Sole Proprietorship [/B]do not.

Right. An LLC and a sole proprietorship are two different things. The fact that the IRS under certain circumstances treats an LLC like a sole proprietorship does not change this fact.

I also read where some states are fighting this. I am wondering what anyone else is telling their clients.

There is one court case affecting only the plaintiffs that has put it on hold for those plaintiffs, pending appeals (or something like that). Probably won't be resolved until it eventually makes its way up the judicial garbage heap to the top.