Who Is and Isn’t Considered a Company Applicant?

Filing your Beneficial Ownership Information Report (BOI) can seem like a simple process. Still, many business owners get stuck when it’s time to decide who to list as a company applicant. It’s easy to get confused by new terms like those introduced by the BOI Report, and their meaning seems unclear at first. This can be especially stressful when mistakes on your BOI Report can lead to steep penalties and more time wasted fixing the filing.

To help you understand who counts as a company applicant (and who might not), we’ve gathered some common and uncommon examples.

Who qualifies as a company applicant?

According to the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), a company applicant is the individual primarily responsible for filing the business’s original formation documents with the required government authority (usually the State’s Secretary of State.) Since a maximum of two company applicants can be listed, the only other individual who might be considered a company applicant would be the person who directed the registration filing. Company applicants will only be reported for businesses formed on or after January 1st, 2024. Here are 3 common examples of company applicants:

Founding Business Owner

This example is the most obvious. If you’re the do-it-yourself type and you personally submitted the filing that formed your company, you would be the company applicant for your business. If you’re a partner in a business, but another partner handled the filing of the registration, they would most likely be considered the company applicant.

If you and another partner in the business played equal roles in the business’s registration, both of you would be considered a company applicant.

Internal Filer

If an internal employee was tasked with filing the business’s registration, they might be considered a company applicant. The determining factor is whether this employee personally filled out the registration document, or merely delivered an envelope to the Secretary of State. While internal employees who filled out the business registration would be considered a company applicant, they likely would not be the sole company applicant. The individual who directed the filing and assigned the task to the employee would also be considered a company applicant.

Third-Party Companies and Individuals

If you hired a law firm, CPA, or other third party to file your business’s registration, they may be considered a company applicant. It really just depends on their involvement in and knowledge of your business. The third party likely would not be considered a company applicant if they simply submitted the filing on your behalf, but could be a company applicant if they have more involvement in your company like maintaining your financials or providing legal counsel. When a third party is a company applicant, like with the internal employee example, they won’t be the exclusive company applicant. The person who directed the filing and hired the third party would also be considered a company applicant.

Who doesn’t qualify as a company applicant?

Not everyone who briefly touched your business’s registration is considered a company applicant. Even beneficial owners, individuals who own a substantial share of the business or exercise control over its interests, are not necessarily considered company applicants. Don’t make the mistake of using these two terms interchangeably. Here are 3 examples of individuals who would not be considered company applicants:

Legal counsel or consulting accountants

If you hired a CPA or legal counsel to answer questions about your business’s registration, but not to directly file it on your behalf, they would not be considered a company applicant. Remember, only those directly involved in filing your company’s registration can be considered a company applicant.

Passive investors

Passive investors who exchanged capital or assets for a share in the business but played no role in its registration are not considered company applicants. This is a great example of a beneficial owner not being a company applicant, as even owning a considerable share in a business does not make someone responsible for its registration filing.

Third-party courier or delivery service

If you, or the individual tasked with filing the registration of your company, hired someone to deliver your registration documents to the secretary of state, that delivery person is not considered a company applicant. Yes, we realize this isn’t the most relatable example, but it happens, so it’s worth mentioning.

I’m not like other company applicants…

Determining who your company applicants are can be extremely stressful given the limited examples, vague definitions and stiff penalties. While the examples above may be helpful, they do not cover all possible scenarios. If you can’t decide if an individual might be considered a company applicant, ask yourself these questions:

• Did they complete the formation document and provide it to the state for filing?
• Did they provide all of the details and information needed to complete the filing?
• Did they draft any optional provisions included in the filing?
• Were they personally involved in the creation of the business?
• Would this person be aware of your underground llama smuggling ring?

Remember, the purpose of the Company Application listing on a BOI Report isn’t necessarily to collect information on people who copied and pasted information onto a form or delivered an envelope for you. The purpose is to identity the individuals who were there and took part in the business’s formation. The goal of the Corporate Transparency Act is…wait for it…transparency, and this information is designed to help government be better equipped to combat financial crimes.

If you’re a non-exempt reporting company that needs to file a BOI Report this year, and you’re not sure where to start, Northwest Registered Agent is here to help. Our BOI Report filing service won’t break the bank, but it will make your life easier. Hire us today to handle your BOI Report so that you can get back to business.