Yes, you (probably) need to file a Beneficial Ownership Information Report or BOIR

Let's get right to the point.

Yes, you probably* need to file a report,
It's neither hard nor expensive, and
It’s not because you offer psychedelic medicine and/or therapy.

* Non-profits organized under Section 501(c) of the IRC of 1986 may be exempt.

If you are one of many healthcare providers who started your own private practice recently, you may have heard of a new law which requires you to take action soon.

For most small medical practices established before January 1, 2024, it shouldn’t take more than 15 minutes. (If you formed on January 1, 2024, or later, it might take a few minutes longer.) This estimate includes the time to read and fact-check this article, gather your info, and complete the online form.

Government authorities and banks are exempt but not you

Congress passed the Corporate Transparency Act or CTA in 2022. The purpose is to fight financial crimes like donating to terrorists and laundering money. And while some may argue that levying property taxes and charging 24.99% interest rates constitute the real financial crimes, your local school district and bank are already governed by transparency laws.

If, when you established your medical practice, you filed a document with your state’s secretary of state or similar office, you are a reporting company and therefore must submit a BOIR. In California, this includes all medical (professional) corporations.

‍Note: Sole proprietors are not reporting companies. But like LLCs, they’re prohibited from the practice of medicine in California.

In addition to government authorities and banks, there are 21 other types of exempt entities, but for-profit ketamine clinic is probably not one of them.

Don’t take my word for it. Read “1.2 Is my company exempt from the reporting requirements?” in the Small Entity Compliance Guide.

What is the requirement?

Reporting companies must submit information about the company such as legal name, trade names, the complete US address, the state of formation or first registration (for foreign reporting companies), and the TIN or EIN from the IRS.

Reporting companies must also submit information about each of the company’s beneficial owners including:

Full legal name,
DOB,
Complete residential address, and
A photo of a non-expired US passport, US state driver's license, or other ID issued by a state, local government, or tribe.

You or your delegate must submit this report to the Financial Crimes Enforcement Network or FinCEN (part of the US Department of the Treasury) using the BOI E-Filing System.

What’s a beneficial owner?

Put simply, it’s any individual person who directly or indirectly exercises substantial control over the reporting company OR owns or controls 25% or more of the ownership interests (shares). Either condition makes someone a beneficial owner.

What constitutes substantial control?

Having a senior officer title (or performing the duties of one) such as president, CFO, general counsel, CEO, COO, or any other officer
Authority to appoint or remove any senior officer or most of the Board of Directors
Ability to make important business decisions
Anyone who can exercise substantial control by way of contract, arrangement, understanding, relationship, or habit (this is effectively a catch-all)

Reporting companies may have more than one beneficial owner. If so, all beneficial owners must be reported. If your ownership or management structure is complex, research the definition carefully. It’s probably best to consult with your lawyer too.

How often do I need to report?

If there is any change to the information that you submitted in your initial report, you need to file an updated report within 30 days of the change.

For example: Say that you are a beneficial owner. When you submitted your initial report, you submitted your driver’s license ID and a photo of your driver’s license. One year later, you renew your driver’s license but with a new address. Because your address has changed, you will need to submit an updated report with a photo of your new driver’s license.

If there have been no changes from your initial report, you do not need to submit updates. Further, there are no requirements to submit reports periodically (again, as long as there are no changes) or when you terminate or dissolve your business.

Who will have access to my BOIR after submission?

FinCEN will permit Federal, State, local, and Tribal officials… to obtain beneficial ownership information for authorized activities related to national security, intelligence, and law enforcement.

Your bank may also gain access—with your consent—as well as your bank’s regulators (presumably without notice).

How do I comply?

Your initial report is due based on when you received your Articles of Incorporation or AOI from your secretary of state (or similar agency).

Due by January 1, 2025, for companies established before January 1, 2024.
Due within 90 days of receiving your AOI for companies established on or after January 1, 2024, but before January 1, 2025.
Due within 30 days of receiving your AOI for companies established on or after January 1, 2025.

Note that companies established on or after January 1, 2024, must also report company applicants in addition to beneficial owners. Read more about company applicants in the FAQs.

What if I’m reading this and it’s too late?

If you need to correct a mistake or omission, you have 90 days from the deadline of the original report to avoid penalties. Penalties may be civil, criminal, and harsh for those who willfully violate the law.

Final considerations

Predictably, there are awful people who are using this as a way to defraud busy well-meaning clinicians. While the subterfuge is getting harder to spot thanks to AI, remember:

Never respond to any call, text, or email without pausing to authenticate the sender and their request.

Also: Your lawyer, CPA, or financial advisor may offer to submit your BOIR on your behalf. In fact, if you pay them a lot of money for other services like legal advice and tax prep, they may do this for free if your ownership structure is straightforward.

Lastly: Watch out for internet companies which offer to prepare, transmit, or e-file your BOIR. They charge fees like $49 for an initial filing and $79 annually. If you read this post carefully, these services are completely unnecessary.

For more info

Like any law, there’s more to it than a blog post can convey. I encourage you to do your own research using the links below, review the form, then talk to your lawyer and/or CPA.