There are five exceptions to the definition of beneficial owner. The reporting company does not have to report that individual as a beneficial owner in its BOI report to FinCEN. The company determine whether any exceptions apply to individuals who might otherwise qualify as beneficial owners of your company.
Minor/Child
Then the reporting company may instead report information about the parent or legal guardian of the minor child. When the mirror child reaches the age of Majority for which the company was created then the reporting company will file an updated report with the adult information
Nominee, Intermediary, Custodian, or Agent
The individual merely acts on behalf of an actual beneficial owner as the beneficial owner’s nominee, intermediary, custodian, OR agent. Individuals who perform ordinary advisory or other contractual services (such as tax professionals) likely qualify for this exception. In scenarios where this exception applies, the actual beneficial owner must still be reported.
Employee
This individual qualifies for this exception if he meets all 3 requirements:
A. The individual is an employee of the reporting company, and that the employee is subject to the will and control of his employer in what how and when to do work.
B. If the employee has substantial control or economic benefits from, the reporting company are derived solely from the employment status of the individual as an employee.
C. The individual is not a senior officer of the reporting company. The term “senior officer” means any individual holding the position or exercising the authority of a president, chief financial officer, general counsel, chief executive officer, or chief operating officer, or any other officer, regardless of official title, who performs a similar function.
Inheritor
The individual’s only interest in the reporting company is a future interest through a right of inheritance, such as through a will providing a future interest in a company.
Note: Once the individual inherits the interest, this exception no longer applies, and the individual may qualify as a beneficial owner and the update report needs to be filled.
Creditor
The individual is a creditor of the reporting company. The term “creditor” means an individual who would meet the definition of a beneficial owner of the reporting company solely through rights or interests for the payment of a predetermined sum of money, such as a debt incurred by the reporting company, or a loan covenant or other similar right associated with such right to receive payment that is intended to secure the right to receive payment or enhance the likelihood of repayment. For example, an individual qualifies for the creditor exception if the individual is entitled to payment from the reporting company to satisfy a loan or debt, so long as this entitlement is the only ownership interest the individual has in the reporting company.