How to File BOI Report in Texas – Ultimate Guide (2024)


Steve Goldstein
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How to file a BOI Report in Texas: Since the Corporate Transparency Act, the Beneficial Ownership Information (BOI) principle has become an important aspect of the regulatory framework for Limited Liability Companies, Corporations, and all types of business structures. This act aims to increase transparency and fight against illegal financial activities by requiring businesses to disclose information about beneficial owners. In Texas, companies must comply with these BOI reporting obligations, and this guide will give a comprehensive overview of the processes involved, entities affected, and compliance actions that must be put in place.

Texas, also known as The Lone Star State, has a population of 30,345,487. That makes the state small business friendly. According to the act, small and medium-sized businesses have to file BOI reports. In this article, LLCBuddy editors shared the latest update and mandate on filing BOI reports in Texas

What is Beneficial Ownership in Texas?

Beneficial ownership in Texas entails individuals who own or control an entity ultimately even though legal ownership rests with some other person. These persons may have significant influence over it or hold substantial interest therein as owners. Identifying who qualifies as a beneficial owner is a critical first step in complying with BOI reporting requirements. To be a beneficial owner, one must meet at least one of the following:

  1. Has direct or indirect ownership of 25% or more of the entity’s equity interests
  2. Directly or indirectly exercises significant control over the entity

It should be noted that beneficial ownership can involve complicated ownership structures; therefore entities should conduct thorough assessments of their organizational structure and holdings.

Beneficial Ownership Information Reporting

The BOI (Beneficial Ownership Information) Report is a memo or document that every small and medium-sized business (exemption applicable) has to file with the Financial Crimes Enforcement Network (FinCEN). In Texas, any LLC that is eligible to enlist under the reporting company must file the BOI Report within the given period.

It is not only mandatory for all businesses in Texas but also can lead to heavy monetary penalties along with imprisonment. There are many reasons why the Corporate Transparency Act was started and BOI Report filing becomes mandatory for all businesses in Texas.

BOI Reporting Companies (Entities) in Texas

Not every company, located in Texas, is required to file BOI reports with FinCEN. Only the eligible companies (Reporting Companies) are liable to file the BOI report. Following are the requirements for BOI reporting,

Entities Required to Report

There are certain entities that are considered “Reporting Companies” as per the Corporate Transparency Act and must report beneficial ownership information. Normally, these include:

Exempted Entities

However, it is important to note that there are certain entities in Texas that do not have BOI reporting requirements such as;

corporate-act
  • Sole proprietorships or any business structure that does not require registration under Texas SOS.
  • Large entities (more than 20 employees with $5M revenue)
  • Tax-exempt organizations
  • Inactive entities meeting specific criteria
  • Subsidiaries of exempt entities
  • Complex ownership that is not publicly known

For PLLCs, selected types of companies get to file BOI reports. Small PLLCs that do not meet the eligibility of reporting companies are exempted from filing BOIR. Besides, PLLCs that are already under stringent regulatory authority like the medical or law field, might get an exemption too.

List of Entities Exempted from BOI Reporting According to FinCEN

  • Securities reporting issuer
  • Governmental authority
  • Bank
  • Credit union
  • Depository institution holding company
  • Money services business
  • Broker or dealer in securities
  • Securities exchange or clearing agency
  • Other Exchange Act registered entity
  • Investment companies or investment advisers
  • Venture capital fund adviser
  • Insurance company
  • State-licensed insurance producer
  • Commodity Exchange Act registered entity
  • Accounting firm
  • Public utility
  • Financial market utility
  • Pooled investment vehicle
  • Tax-exempt entity
  • Entity assisting a tax-exempt entity
  • Large operating company
  • Subsidiary of certain exempt entities
  • Inactive entity

Entities should review their classification carefully in order to ascertain if they fall under the requirement for reporting or qualify for an exemption. It is recommended to consult an expert before you start filing your BOI Report. Also, not only the above-mentioned sectors but also the size and structure of the business matters when it comes to filing the report. Hence, it is important to consult an expert beforehand.

How to File a BOI Report in Texas?

In Texas, you can file your BOI report in two ways. The report can be filed online or offline. The process is pretty simple. There is an online and offline (PDF) form available. The reporting company in Texas has to fill up the form and submit it within the given time. Here are the steps to file the BOIR in Texas

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Online BOI Report Filing in Texas

  • Step 1: For online filing, reporting companies in Texas are required to visit the FinCEN BOIR e-filing page.
  • Step 2: The first page shows 4 options, Initial Report, Correct Prior Report, Update Prior Report, and Newly Exempt Entity.
  • Step 3: For the fresh filing, select Initial Report and click NEXT.
  • Step 4: On the next page, fill out the form for Reporting Company and ask for FinCEN ID.
  • Step 5: The ‘Company Applicant’ page comes up next. Add the details wherever is required.
  • Step 6: The next page shows the details of the Beneficial Owner(s). Also, mention if there is an exemption.
  • Step 7: Submit the online form after sharing your name and email on the final page.
BOI reporting e-filing

Offline BOI Report Filing in Texas

  • Step 1: For offline filing, visit the FinCEN BOI Report filing page
  • Step 2: Download the PDF form from the ‘Prepare BOIR’ option
  • Step 3: The PDF form requires Adobe Reader 8 or higher, make sure you have this version installed on your device.
  • Step 4: Save the form on your device.
  • Step 5: Fill it up with the correct information. Make sure to select the ‘Initial Report’ if you’re filing it afresh. For correction or updating the previous form, select the other options.
  • Step 6: Once filled up, upload the form on the site by clicking on ‘Submit BOIR’.
  • Step 7: On the Submit page, you will have to provide your name and email. Click on the ‘upload document’ section to upload the PDF form and submit it.
BOI offline filing

Reporting Process and Timeline

BOI Reporting effectively becomes mandatory from January 1, 2024, in Texas and the rest of the United States. All the LLCs in Texas, Corporations, and other types of businesses registered under Texas Secretary of State will have to file the report within the given time.

  • Entities in Texas incorporated or registered before January 1, 2024, will have to file their BOI report before January 1, 2025.
  • Entities in Texas incorporated or registered on or after January 1, 2024, will have to file their BOI report within 90 working days from the date of completion of company registration with Texas SOS or similar authority.
  • Entities in Texas incorporated or registered on or after January 1, 2025, will have to file their BOI report within 30 working days from the date of completion of company registration with Texas SOS or similar authority.

Penalties for Non-Compliance with CTA (BOI Report Filing)

The authority decides to make it more difficult for the companies that fail to comply with the Corporate Transparency Act or BOI report filing. Following are the monetary and other penalties for non-compliance,

  • The Civil Penalty for missing the deadline in Texas is $500 a day for the company
  • The Criminal Penalty for not filing the BOI Report in Texas is $10,000
  • Continuing violating rules and non-compliance in Texas can lead to 2 years imprisonment

The FinCEN makes sure that every reporting company must file the BOI report as soon as they meet the eligibility criteria. The penalty is heavy, especially for small businesses in Texas.

BOI Reporting Required Information in Texas

The Beneficiary Ownership Information consists of some confidential information about the LLC owners in Texas. The compulsory information to be given in respect of each beneficial owner includes:

business requirement
  • Reporting Company legal name
  • Alternative or DBA Name (if any)
  • Tax Identification type
  • Country/Jurisdiction of Formation
  • Address (number, street, and apt. or suite no.)
  • Individual’s Full Legal Name
  • Date of birth
  • Current Address
  • Identifying document (Type, Number, Issuing Jurisdiction, Image)
  • Beneficial Owner Details (Legal Name, FinCEN ID, Address, DOB)

Entitles should confirm that the information given is correct and up-to-date as any inconsistencies or inaccuracies may attract penalties.

Ensuring their BOI reports are accurate and updated is a responsibility that these bodies have. Disputes or concealed information, therefore, need to be attended to quickly and openly as this is essential in compliance maintenance. Should organizations fail to do this, they may invite increased scrutiny with possible penalties imposed against them.

Privacy and Data Security

While the requirements for BOI reporting in Texas aim at increasing transparency levels, there are practical challenges faced by entities regarding the identification and disclosure of beneficial ownership information. These may include:

  • Complexity in identifying beneficial ownership for entities with intricate ownership structures or multi-layered holding companies.
  • Difficulties in obtaining accurate and up-to-date information from beneficial owners, particularly where ownership interests are held indirectly or via intermediaries.
  • This places an additional burden on small businesses which will find it hard to deploy enough resources and personnel to deal with compliance matters.

Entities can overcome these hurdles through engagement of professionals’ advice; and having internal mechanisms that strengthen their capacity to communicate with their beneficiaries.

Regulatory and Legal Considerations

In addition to the issues above, entities in Texas must also navigate numerous regulatory and legal considerations when reporting BOI. These include:

  • Balancing transparency with legitimate privacy concerns, especially for individuals who may be exposed to personal safety risks or other sensitive situations.
  • Addressing international implications and cross-border ownership structures since BOI reporting requirements can vary across jurisdictions.
  • Compliance with other relevant legislations such as anti-money laundering (AML) laws and know-your-customer (KYC) regulations is necessary as well.

What helps entities address these concerns is consulting the legal fraternity on changes occurring within the regulatory space.

Anticipated Changes and Updates

With time, FinCEN together with other relevant agencies will provide further guidance on complying with these reporting requirements as financial crime evolves. For instance, new changes could affect how they comply with these requirements. Additionally, in the future, there is a possibility of expanding or modifying the reporting requirements to deal with emerging issues or any possible loopholes.

Impact on Businesses and Financial Sector in Texas

The introduction of BOI reporting requirements will have profound effects on both corporate entities and the financial sector as a whole. Likely consequences could include:

  • Increased administrative burdens and compliance costs for firms, especially at the early stages of implementation.
  • Enhanced due diligence procedures by financial institutions to verify the accuracy of BOI reports and identify potential red flags.
  • Business practices may change leading to ownership structures that are more flexible to fit into new transparency needs.
  • Entities that have complex ownership arrangements or those operating internationally may face some difficulties.

Nonetheless, in the long run, it can be expected that this law would go towards creating an environment where business is transparent and accountable thus enhancing trust and integrity within the financial system.

Significance of Reporting Beneficial Ownership Information

Reporting BOI is essential for several reasons. We have come up with three main reasons that CTA pointed out for having BOI reporting.

business
  • Preventing Illegal Activities: Identifying true owners helps to combat money laundering, terrorist financing, and other financial crimes in Texas since bad actors cannot hide behind complex corporate structures.
  • Enhancing Transparency: It ensures corporate transparency and accountability so that entities cannot operate under cover but are required to reveal who their beneficial owner(s) are.
  • Facilitating Law Enforcement: Accurate data on BOI allows law enforcement authorities to investigate and prosecute fraudulent activities better thus protecting a fair business environment.

Starting an LLC in Texas or forming a corporation in Texas can be an eyewash of hiding other shady activities or illegal businesses. Companies often create shell companies to money launder. This reporting was started to prevent such activities in Texas.

State Specific Data: Texas

Capital and Incorporation

  • The capital of Texas is Austin.
  • The population of Texas: 30,345,487
  • The Annual GDP of Texas: 2,402,237
  • Incorporation in Texas can be done through various methods including online and offline. For more details, visit Texas Secretary of State.
  • Incorporation Method in Texas (Online): Create an account/Log in to the SOS site, get the e-form, fill it, and submit online. Or get the online PDF, fill it up and upload it back on the site.
  • Incorporation Method in Texas (Offline): Send the form by mail to or drop it off in person at Secretary of State, P.O. Box 13697, Austin, TX 78711-3697. Or Fax it to (512) 463 – 5709

Filing Fees

  • LLC Initial Filing Fee: $300
  • LLC Amendment Fees: $150
  • Annual Fee: $0 because it is not mandatory
  • DBA Filing Fee: varies by county
  • Incorporation Fee: $300 for filing online, by mail, in person filing, or by Fax
  • Registered Agent Change Fee: $15
  • Corporate Amendment Fee: $25

Important Offices

  • State Tax Office: Texas Comptroller of Public Accounts
  • State Insurance Office: Texas Department of Insurance
  • Secretary of State Address: Secretary of State, P.O. Box 13697, Austin, TX 78711-3697
  • Department of Treasury: Department of the Treasury Internal Revenue Service Center – Ogden, UT 84201 Fax: 855-214-7520​

Key Contacts

  • Form 2335 Mailing Address: Department of the Treasury Internal Revenue Service Center – Ogden, UT 84201 Fax: 855-214-7520​
  • Filing Method for DBA: two methods, by mail and in person.
  • Filing Fee for DBA: varies by county
  • Online Filing for DBA: There is no online filing available
  • Offline Filing for DBA: For filing offline in Texas, you must send the accomplished DBA filing form to the County Clerk’s Office where your business is located. The mailing address and drop-off location will vary depending on the specific county.

By staying compliant with the BOI reporting requirements and leveraging the resources available in Texas, businesses can ensure they meet all regulatory obligations efficiently.

FAQs

How do I file a BOI report in Texas?
To file a BOI report in Texas, you can visit the Texas Department of Insurance website and follow the instructions provided.
Is it mandatory to file a BOI report in Texas?
Yes, it is mandatory to file a BOI report in Texas if you have been involved in an accident.
What information do I need to provide when filing a BOI report in Texas?
When filing a BOI report in Texas, you will need to provide details about the accident, including the date, time, location, and driver’s information.
Can I file a BOI report online in Texas?
Yes, you can file a BOI report online in Texas by visiting the Texas Department of Insurance website.
How long do I have to file a BOI report in Texas after an accident?
In Texas, you have up to 10 days to file a BOI report after an accident.
What happens if I don’t file a BOI report in Texas?
If you fail to file a BOI report in Texas, you may face penalties such as fines or even suspension of your driver’s license.
Can I file a BOI report in person in Texas?
Yes, you can file a BOI report in person at any Texas Department of Insurance office.
Is there a fee to file a BOI report in Texas?
There is no fee to file a BOI report in Texas.
Can I file a BOI report over the phone in Texas?
Yes, you can contact the Texas Department of Insurance by phone to file a BOI report.
How long does it take to process a BOI report in Texas?
The processing time for a BOI report in Texas can vary, but you should receive a confirmation of receipt within a few days.
Can I amend a BOI report after filing it in Texas?
Yes, you can make amendments to a BOI report in Texas by contacting the Texas Department of Insurance.
Do I need to notify my insurance company if I file a BOI report in Texas?
Yes, you should notify your insurance company once you file a BOI report in Texas.
Can I file a BOI report if I was involved in a hit-and-run in Texas?
Yes, you can still file a BOI report in Texas even if you were involved in a hit-and-run accident.
Do I need a police report to file a BOI report in Texas?
While a police report is not required to file a BOI report in Texas, it may help with the claims process.
What is the purpose of filing a BOI report in Texas?
Filing a BOI report in Texas helps gather information about an accident and determine fault in insurance claims.
Can I file a BOI report if the accident was my fault in Texas?
Yes, you can still file a BOI report even if you were at fault in the accident in Texas.
Will filing a BOI report affect my insurance rates in Texas?
Filing a BOI report may or may not affect your insurance rates in Texas, depending on the circumstances of the accident.
How can I obtain a copy of my BOI report in Texas?
You can request a copy of your BOI report in Texas from the Texas Department of Insurance.
Can I file a BOI report on behalf of someone else in Texas?
Yes, you can file a BOI report on behalf of someone else if they are unable to do so themselves in Texas.
Do I need an attorney to file a BOI report in Texas?
While it is not mandatory to have an attorney to file a BOI report in Texas, you may choose to consult with one for legal advice.
Can I file a BOI report for a minor in Texas?
Yes, you can file a BOI report on behalf of a minor in Texas.
Is the information in a BOI report confidential in Texas?
The information in a BOI report is confidential and will only be disclosed to parties involved in the accident in Texas.
Can I file a BOI report for an accident that occurred out of state but involves a Texas resident?
Yes, you can file a BOI report for an out-of-state accident involving a Texas resident in Texas.
What should I do if I have questions about filing a BOI report in Texas?
If you have questions about filing a BOI report in Texas, you can contact the Texas Department of Insurance for assistance.
Can I file a BOI report if the accident occurred on private property in Texas?
Yes, you can still file a BOI report in Texas even if the accident occurred on private property.
Are there any time limitations for filing a BOI report in Texas?
Yes, in Texas, you have up to 10 days from the date of the accident to file a BOI report.
Is filing a BOI report required for all types of accidents in Texas?
Filing a BOI report is required for most types of accidents in Texas, but there may be exceptions such as minor fender benders.
What is a BOI report in Texas?
A BOI report in Texas stands for Bureau of Insurance report, which is used to report insurance-related fraud or misconduct.
Can I file a BOI report anonymously in Texas?
Yes, in Texas, you can file a BOI report anonymously if you choose to do so.
Is there a deadline for filing a BOI report in Texas?
While there is no specific deadline for filing a BOI report in Texas, it is recommended to make the report as soon as possible after discovering the issue.
Can I file a BOI report in Texas if I am not a resident of the state?
Yes, you can still file a BOI report in Texas even if you are not a resident of the state as long as the incident occurred in Texas.
Can I file a BOI report in Texas for any type of insurance-related issue?
Yes, you can file a BOI report in Texas for any type of insurance-related issue, including fraud, misconduct, or unethical behavior.
Is there a fee for filing a BOI report in Texas?
No, there is no fee for filing a BOI report in Texas. It is a free service provided by the Texas Department of Insurance.
Can I file a BOI report in Texas if I am a victim of insurance fraud?
Yes, if you are a victim of insurance fraud in Texas, you should file a BOI report to report the incident.
What is the process for filing a BOI report in Texas?
The process for filing a BOI report in Texas involves providing detailed information about the incident, including any supporting documentation, and submitting the report electronically.
Will I be notified of the outcome of a BOI report in Texas?
Yes, you should receive notification of the outcome of a BOI report filed in Texas, including any actions taken by the Texas Department of Insurance.
Can I file a BOI report in Texas for a claim denial?
If you believe your insurance claim was wrongly denied, you can file a BOI report in Texas to investigate the issue further.
Can I file a BOI report in Texas against an insurance company?
Yes, you can file a BOI report in Texas against an insurance company if you believe they have engaged in misconduct or fraudulent behavior.
How can I follow up on a BOI report in Texas?
To follow up on a BOI report in Texas, you can contact the Texas Department of Insurance and inquire about the status of your report.
Can I provide evidence or supporting documentation with my BOI report in Texas?
Yes, it is recommended to provide any evidence or supporting documentation with your BOI report in Texas to help facilitate the investigation.
Will my identity be protected when filing a BOI report in Texas?
While Texas allows for anonymous reporting of a BOI report, your identity may be disclosed during the investigation process if needed.
Can I file a BOI report in Texas for discrimination or unfair treatment by an insurance company?
Yes, you can file a BOI report in Texas for discrimination or unfair treatment by an insurance company, as these are considered valid reasons for filing a report.
What happens after I file a BOI report in Texas?
After filing a BOI report in Texas, the Texas Department of Insurance will review the report, conduct an investigation if necessary, and take appropriate action based on their findings.
Can I file a BOI report in Texas if I suspect insurance fraud?
Yes, if you suspect insurance fraud in Texas, you should file a BOI report to report your concerns to the appropriate authorities.
Is it necessary to hire an attorney to file a BOI report in Texas?
No, it is not necessary to hire an attorney to file a BOI report in Texas. You can file a report on your own through the Texas Department of Insurance website.
Do I need to provide my contact information when filing a BOI report in Texas?
While providing contact information is optional when filing a BOI report in Texas, it may be helpful for further communication during the investigation process.
Can I file a BOI report in Texas for a dispute with an insurance adjuster?
Yes, if you are in dispute with an insurance adjuster in Texas, you can file a BOI report to seek resolution and investigate any potential misconduct.
Can I file a BOI report in Texas if my insurance rate suddenly increased without reason?
Yes, if your insurance rate increased without a valid reason in Texas, you can file a BOI report to investigate the issue.
How can I check the status of a BOI report in Texas?
To check the status of a BOI report filed in Texas, you can contact the Texas Department of Insurance and inquire about the progress of your report.
Can I file a BOI report in Texas if I suspect an insurance agent of unethical behavior?
Yes, if you suspect an insurance agent of unethical behavior in Texas, you should file a BOI report to report your concerns and protect consumers from potential harm.
Can I request confidentiality when filing a BOI report in Texas?
While Texas allows for anonymous reporting of a BOI report, you can request confidentiality if you provide your contact information to the Texas Department of Insurance.

Also Read

In Conclusion

In the world of business, conducting illicit monetary transactions is not a new thing. To prevent that the Corporate Transparency Act came into the picture. Businesses in Texas, especially, small and medium businesses must file the Business Ownership Information Report to combat growing financial crimes. In Texas, the companies must understand the obligations to comply with the rules.

In Texas, before you start filing the BOI Report, there are a few important points to note. Important points worth noting are:

  • Identifying beneficial owners from their control or ownership interests over the entity.
  • Reporting accurate information at all times including names, dates of birth, addresses, and identification details about beneficiaries.
  • Timely filing of the initial reports and updating the reports in case of changes.
  • When required, involve reputable third-party service providers to assist in the filing process.
  • Ensure compliance with relevant penalties for non –compliance.
  • Deal with practical challenges and legal issues related to BOI reporting.
  • Keep abreast of future developments and advice from relevant bodies.

Filing the BOI Report does not require complicated steps, however, it definitely requires an expert to proceed. We recommend TailorBrands, one of the best LLC formation services that not only offers free LLC formation but also offers BOI Reporting at a very reasonable cost.

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