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Beneficial Ownership Information (BOI) Report

A Beneficial Ownership Information Report is a report submitted to the Financial Crimes Enforcement Network (FinCEN) under the Corporate Transparency Act. The report contains information about the company and identifies the individuals who own or control it, either directly or indirectly.

BOI Reporting Requirements

The Corporate Transparency Act requires non-exempt new and existing businesses to file information reports with FinCEN, a bureau of the U.S. Treasury responsible for fighting financial crimes. FinCEN began accepting initial reports on January 1, 2024.

The report involves basic information about the company, identifying information about its owners, and details about the person filing.

PDF Software Requirements

The PDF provided by FinCEN must be completed using Adobe Reader or Adobe Acrobat (version 8 or higher). When downloading, the PDF may initially display a warning page describing the software requirements. This is normal and does not prevent a successful download.

Who Needs to File?

All entities designated as a “Reporting Company” under the Corporate Transparency Act are subject to BOI reporting requirements.[1]

Reporting Companies

The following types of entities must file BOI reports:

  • Corporations
  • Limited liability companies (LLCs)
  • Entities created by registering with a Secretary of State or similar state or tribal office
  • Foreign corporations, LLCs, or other entities formed under the law of a foreign country that are registered to do business in a state or tribal jurisdiction

Exemptions

The law exempts 23 types of businesses from BOI filing requirements. While most exemptions deal with large companies and corporations, several do apply to small or mid-sized businesses:[2]

  • Accounting firms
  • Tax exempt entities
  • Inactive entities

A Sole Proprietorship is not a Reporting Company unless it was created by filing a document with a Secretary of State or similar office.[3]

FinCEN provides a Small Entity Compliance Guide to help define requirements and clarify exemptions. Consult a legal professional for further guidance.

What Is the Corporate Transparency Act?

In 2021, Congress passed the Corporate Transparency Act in an effort to make it more difficult for bad actors to use U.S. companies as a means of hiding and benefitting from illegally gained assets. Its purpose is to create transparency around the ownership structure of businesses.[4]

When to File

All Reporting Companies must file an initial report by a specific deadline to be in compliance. Filing deadlines vary based on the date the company was created.[5]

Initial Report Filing Deadlines

Company Creation Date Filing Deadline
Before January 1, 2024 January 1, 2025
Between January 1, 2024 and January 1, 2025 Within 90 days of receiving notice that its creation or registration is effective
On or after January 1, 2025 Within 30 days of receiving notice that its creation or registration is effective

Updated and Corrected Reports

If the information provided in the initial report changes or is discovered to be incorrect, an updated report must be filed within 30 calendar days.[6]

Filing Instructions

Companies can file online with third-party software or by accessing FinCEN’s BOI E-Filing portal. There, users can either download the PDF or complete the questionnaire digitally. There is no fee for submitting the information report.[7]

The person preparing the report, known as the Company Applicant, should be ready to provide the following information:

  • Company names and addresses, including legal name and any trade or DBA names
  • Names and addresses of any individuals qualifying as a Beneficial Owner
  • The Company Applicant‘s state or federal identification number and a picture of the identification document (for companies created after January 1, 2024)

What is a Beneficial Owner?

The term Beneficial Owner means “any individual who, directly or indirectly, either exercises substantial control over such reporting company or owns or controls at least 25% of the ownership interests of such reporting company.”[8]

What is a Company Applicant?

A Company Applicant is the individual who directly files the BOI on behalf of the reporting company. If more than one person is involved in the filing of the document, the Company Applicant is the person who is primarily responsible.[9] Companies registered or created before January 1, 2024 are not required to report their Company Applicant.[10]

Penalties

The Corporate Transparency Act imposes hefty civil and criminal penalties for individuals and corporate entities that purposefully disregard or violate BOI reporting requirements. These include fines of up to $500 per day that the violation continues and up to two years’ imprisonment.[11]

Reporting Companies can avoid penalties by correcting mistakes or omissions within 90 days of the filing deadline.[12]

Sources

  1. Definition of Reporting Company | 31 C.F.R. §1010.380(c)(1)
  2. Exemptions | 31 C.F.R. §1010.380(c)(2)
  3. Sole Proprietorships | FinCEN FAQ
  4. Purpose of BOI Reporting | FinCEN FAQ
  5. Initial Report | 31 C.F.R. §1010.380(a)(1)
  6. Updated and Corrected Reports | 31 C.F.R. §1010.380(a)
  7. BOI Filing Fees | FinCEN FAQ
  8. Beneficial Owner Defined | 31 C.F.R. §1010.380(d)
  9. Company Applicant Defined | 31 C.F.R. §1010.380(e)
  10. Conpany Applicant Reporting | FinCEN FAQ
  11. Penalties | FinCEN FAQ
  12. Corrections Within 90 Days | FinCEN FAQ