BOI Reporting Requirements

The Financial Crimes Enforcement Network (FinCEN) Beneficial Ownership Information (BOI) report, which became effective on January 1, 2024, is a regulatory requirement of the Corporate Transparency Act (CTA) of 2021. Specifically, the report specifically aims to combat financial crimes and ensure transparency in financial transactions by containing identifying information about the company’s beneficial owners.

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December 17, 2024

Who must file the BOI Report?

All domestic and foreign corporations, LLCs, and other business entities with fewer than 20 employees in the US and less than $5 million in gross receipts or sales must file the report. However, companies with more than 20 employees and that have more than $5 million in gross receipts must meet other reporting requirements that report comparable information as the BOI report.

Who does not need to file the BOI report?

Presently, certain companies are exempt from the BOI reporting. These include publicly traded companies, tax-exempt not-for-profits, and certain large operating companies. For a complete list of exempt entities, please visit the FinCEN website.

Who is a Beneficial Owner?

Chiefly, a beneficial owner is an individual who, directly or indirectly, either:

exercises substantial control over the reporting company or
owns or controls at least 25 percent of the company’s ownership interest

According to FinCEN, the following individuals qualify as exercising substantial control:

Senior officers (e.g., president, chief financial officer, chief executive officer)
Individuals who have the authority to appoint or remove certain officers or a majority of directors
Important decision-makers within the company
Individuals who hold any other form of substantial control

Who is Not a Beneficial owner?

Furthermore, FinCEN outlines five exceptions regarding who is a beneficial owner for the BOI report:

Minor child
Nominee, intermediary, custodian, or agent
Employee
Inheritor
Creditor

For more details on these exceptions, refer to the BOI Small Compliance Guide.

Information Beneficial Owners Must Report

The FinCEN requires the following information on the BOI report from a company’s beneficial owners:

Owner’s Name
Date of Birth
Home Address
Identification number and issuer from either a non-expired US driver’s license, US passport, or ID document issued by a State, local government, or Indian tribe. If these documents are unavailable, a non-expired foreign passport number can be used. An image of the driver’s license or US passport must be included, and the ID number entered must match.

Information Companies Must Report

Companies must also provide specific information in the BOI report, including:

Legal name
Any trade names (doing business as, dba, or trading names)
Current address of the principal place of business in the United States. If the company’s principal place of business is outside the US, it must report the primary location in the United States where the company conducts business.
State, tribal, or foreign jurisdiction of formation

Deadlines for the BOI report

Explicitly, the due date for the BOI report depends on when the company was registered.

Companies registered before January 1, 2024: The deadline is January 1, 2025

Entities registered on or after January 1, 2024, and before January 1, 2025: The report is due within the first 90 days.

Companies that register on or after January 1, 2025: The report is due within the first 30 days.

Moreover, updates or corrections to previously filed BOI reports must be submitted within 30 days.

Penalties for not filing

Willful failure to submit the report can result in civil penalties of up to $591 (adjusted annually for inflation) each day the report is not submitted. Criminal penalties of up to two years imprisonment and a fine of up to $10,000 may also apply.

How to file

You must file the BOI report through FinCEN’s website. Additionally, after the report is successfully filed, the system provides a confirmation of receipt.

References

Beneficial Ownership Information Reporting | FinCEN.Gov. https://www.fincen.gov/boi-faqs#C_2