Business Law

June 6, 2024

Why Real Estate Agents and Brokers with an LLC Need to File a BOI Report Despite State Regulation

Discover the requirements for real estate LLCs under the Corporate Transparency Act. Learn about BOI report exemptions, what information must be disclosed, and how FinCENBOIFiling.com can help you comply effortlessly.

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Key Takeaways:

  • Real estate LLCs must file BOI reports to comply with federal mandates.
  • Understanding exemptions and requirements is crucial for compliance.
  • FinCENBOIFiling.com offers a simple, secure solution for your BOI reporting needs.

Understanding the BOI Report Requirement for Real Estate LLCs

Real estate agents and brokers operating under a Limited Liability Company (LLC) structure must adhere to a federal mandate that requires the filing of a Beneficial Ownership Information (BOI) report. This requirement, enforced by the Financial Crimes Enforcement Network (FinCEN), serves a distinct purpose from state real estate regulations. While state oversight covers areas like licensing, professional conduct, and transaction requirements, the federal BOI report aims specifically to enhance transparency and prevent illegal activities such as money laundering and fraud.

Who Needs to File a BoI Report?

The Corporate Transparency Act provides exemptions for some federally regulated industries, but real estate companies and professionals generally do not fall within these exempt categories. Most exemptions apply to entities already subject to substantial reporting requirements to federal agencies, such as publicly traded companies, banks, credit unions, investment advisers, money transmitters, and tax-exempt entities like charities and non-profits.

What Information Must Real Estate LLCs Disclose?

The BOI report mandates that real estate LLCs disclose specific details about their ownership and control structure. This includes the names, birthdates, addresses, and identifying information (e.g., passport or driver’s license numbers) of any individuals who meet the criteria of a beneficial owner. A beneficial owner is generally defined as an individual who, directly or indirectly, owns or controls at least 25% ownership interest in the LLC. Additionally, the report should delineate the control structure of the LLC, providing clarity on how decisions are made and who holds ultimate authority.

Exemptions for Large Operating Companies

Certain large real estate operations may qualify for an exemption from filing a BOI report if they meet specific criteria outlined by FinCEN. To be considered exempt, an LLC must have:

  • Over 20 full-time employees,
  • Annual revenue exceeding $5 million,
  • A physical operating presence within the United States

Examples of potentially exempt large operations include major brokerage firms, extensive property management companies, and large real estate investment trusts (REITs) with substantial portfolios and resources.

Why are Large Operating Companies Exempt?

Large operating companies are exempt from the Beneficial Ownership Information (BOI) reporting requirement under the Corporate Transparency Act (CTA). This exemption is based on the idea that well-established companies with a significant U.S. presence and a large workforce are less likely to be used for the illicit financial activities that the CTA seeks to prevent.

The implications of these exemptions are multifaceted. For one, being exempt from BOI reporting can significantly reduce administrative and compliance-related burdens. This allows large real estate operations to allocate resources more efficiently, focusing on core business activities rather than regulatory compliance. Additionally, exemption from BOI filing can streamline internal processes and enhance operational efficiency.

BOI Compliance is Crucial

Compliance with the BOI reporting requirement is crucial for real estate agents and brokers, even if they are already subject to stringent state regulations. The BOI report is a vital tool in the ongoing effort to ensure transparency and security in the real estate industry, maintaining public trust and deterring illicit activities. Failure to file the BOI report can lead to unnecessary and severe penalties.

Realtors, Simplify Your BOI Reporting with FinCEN BOI Filing

Realtors and brokers with LLCs need to understand their obligations under the Corporate Transparency Act (CTA) and the need to file a Beneficial Ownership Information (BOI) report. While real estate professionals may not fall under the exempt categories, compliance with BOI reporting requirements is crucial for transparency and combating financial crimes.

Fortunately, FinCEN BOI Filing offers a streamlined solution to assist realtors and brokers in meeting their reporting obligations swiftly, easily, and accurately. If you are unsure if you need to file the BOI report you can take our 2-minute BOI eligibility quiz to determine if you have a BOI filing requirement. On our homepage real estate professionals can navigate the complexities of BOI reporting with confidence, ensuring compliance while focusing on their core business activities. Don’t let BOI reporting become a burden—let FinCENBOIFiling.com simplify the process for you.

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  • 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 company or investment adviser
  • 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