Corporate Transparency Act Beneficial Ownership Information Reporting is now open to business entities formed in U.S.

What Is A FinCEN Identifier (FinCEN ID)?

FinCEN Identifiers, or “FinCEN IDs”, are unique identifying numbers used by the Financial Crimes Enforcement Network (FinCEN) to identify individuals and companies for Beneficial Ownership Information Reporting (BOIR). 

FinCEN rolled out the FinCEN ID number system to help businesses streamline the BOIR process and comply with the reporting requirements of the Corporate Transparency Act. 

In this article, we take a closer look at what exactly FinCEN IDs are, how they can be used, and who can benefit from using them. 

What are Beneficial Ownership Information Reports (BOIR)? 

The Beneficial Ownership Information Report (BOIR) and FinCEN ID system were introduced by the Corporate Transparency Act (CTA), a federal law that went into effect on January 1, 2024. The CTA requires U.S. companies to disclose details about their significant owners and decision-makers. Congress passed the CTA to help law enforcement agencies detect and prevent potential financial crimes.

Here’s how BOIR works: Reporting companies share their ownership information with the Financial Crimes Enforcement Network (FinCEN) by filing a Beneficial Ownership Information (BOI) Report. FinCEN is responsible for securely storing the information, as well as enforcing the reporting requirements.

What Are FinCEN IDs?

FinCEN introduced FinCEN Identifiers, or “FinCEN IDs”, to help business owners streamline the reporting process. These IDs are unique identifying numbers for individuals and entities that can be used for BOI Reporting.

Companies and their beneficial owners can obtain FinCEN IDs by completing an application and providing certain information. FinCEN IDs can be used in place of someone’s personal information in updated BOI Reports, or if the same person needs to be reported as a beneficial owner for multiple companies.

How Do FinCEN IDs Work?

FinCEN IDs offer a convenient alternative to repeatedly inputting Beneficial Ownership Information in every BOI Report a company files. Rather than filling in details, like a person’s name, date of birth, address, and ID document image each time, you can simply use their FinCEN ID. FinCEN IDs can be used to complete initial, updated, or corrected BOI Reports.

Who Can Get a FinCEN Identifier?

The FinCEN ID application is open to everyone. It doesn’t matter if you’re a beneficial owner, a control party, or a company applicant linked to a reporting company – you’re eligible for your own unique FinCEN ID. And it’s not just individuals; reporting companies themselves can also get a FinCEN ID, which becomes associated with the entity.

How to Get a FinCEN ID

Obtaining a FinCEN ID is a straightforward, online process. Start by creating an account on FinCEN’s website. The application will require the same information needed for BOI reporting:

  • Full legal name
  • Date of birth
  • Current residential address
  • Unique identifying number from a valid driver’s license, passport, or state ID
  • An image of the ID document.

After submitting these details, FinCEN will provide you with your unique FinCEN ID number.

Reporting companies can obtain a FinCEN ID number through a slightly different process. A reporting company can choose to receive its FinCEN ID when it completes its Initial BOI Report. Just select the checkbox in the reporting form and you will get a company FinCEN ID if your report is accepted.

Should I Get a FinCEN ID?

Is a FinCEN ID right for you or your business? FinCEN identifiers can be a useful tool for streamlining the BOI Reporting process. Here’s who might find a FinCEN ID most valuable:

  • Beneficial owners and company applicants sharing their info across multiple reporting companies.
  • Reporting companies with frequent changes in their ownership or leadership, leading to regular updates in BOI Reports,
  • Anyone associated with a reporting company seeking extra privacy during the reporting process.

FinCEN ID Benefits

Let’s look at how a FinCEN ID can ease the BOI Reporting process and help you stay compliant with the Corporate Transparency Act:

Protect Your Personal Information

Getting a FinCEN ID is a possible solution if you want to limit the number of people who will see or handle your sensitive information during the reporting process.

One of the key perks of having a FinCEN ID is the added layer of privacy it provides. Imagine being a beneficial owner involved with several LLCs. Each company needs your personal details to file their individual BOI Reports.

Instead of sending sensitive information, like your ID and address, via email multiple times, a single FinCEN ID number does the job. Those handling the reports can simply use your ID number, instead of having to input your personal details.

Save Time When Updating Reports

Additionally, getting a FinCEN ID can make it easier for both individuals and reporting companies to update or correct information in the BOI Report. Rather than re-submitting your personal details for each new report, you can use a FinCEN ID. This not only saves time, but also reduces the risk of data exposure.

While you can’t skip sharing your details with the government for BOI Reporting, a FinCEN ID limits how many others see your information. This approach can significantly reduce the risk of data breaches and keep your personal information more secure.

Why Would I Not Want a FinCEN ID?

Beneficial owners, control parties and company applicants should know that getting a personal FinCEN ID number changes the legal burden of BOI Reporting. Under FinCEN’s rules, the reporting company bears the responsibility of making sure the information reported is accurate and kept up-to-date. However, once you obtain your personal FinCEN ID, this responsibility partially shifts to you.

When you get your own FinCEN ID, it becomes your responsibility to keep your information up to date with FinCEN. This isn’t just a formality; it’s a legal obligation. Failing to keep your information current can lead to serious penalties.

You could face civil fines for not keeping your FinCEN ID information up to date. Additionally, there are criminal penalties to consider, which can include up to two years in jail.

By understanding these nuances, you can make an informed decision about whether a FinCEN ID aligns with your needs and capacity to manage these responsibilities.

What to Do After Getting a FinCEN ID?

After securing your FinCEN ID, it’s crucial to stay on top of any changes to your information.

FinCEN’s current regulations give you 30 calendar days to update your information after a change occurs. So if your address changes, or the ID you used for the report expires, you will need to submit a new application to FinCEN within 30 days. Miss the 30-day mark, and you’ll be out of compliance.

This rule also applies if you provided any incorrect or inaccurate information to FinCEN in a previous report. If you realize information you submitted previously is incorrect, like a typo in your name or an incorrect ID number, you need to correct it with a new application. Again, you have 30 calendar days to make these corrections.

How Much Time Does Obtaining a FinCEN ID Take?

FinCEN stores the information it collects for FinCEN IDs in its Beneficial Ownership Information database. Beneficial Ownership Information is not open to the public, and access to the BOI database is tightly controlled and limited to certain entities, like:

Who Has Access to FinCEN ID Information?

FinCEN stores the information it collects for FinCEN IDs in its Beneficial Ownership Information database. Beneficial Ownership Information is not open to the public, and access to the BOI database is tightly controlled and limited to certain entities, like:

  • Law Enforcement Agencies: Federal and state law enforcement agencies can access the BOI database, but they need FinCEN’s authorization to do so. This access is primarily for aiding in investigations.
  • Financial Institutions and BOI Reports: Banks and other financial institutions can use BOI Reports for customer due diligence purposes. However, they must first get the green light from the reporting company before FinCEN will share any BOI Report.