November 1, 2024

Starting January 1, 2024, many small and medium-sized businesses in the U.S. must comply with new Beneficial Ownership Information (BOI) reporting requirements under the Corporate Transparency Act (CTA). This law, enforced by the Financial Crimes Enforcement Network (FinCEN), aims to combat financial crimes such as money laundering and tax fraud. Non-compliance could result in significant penalties, including fines and jail time.

Below, we’ll break down the essentials of BOI reporting, including deadlines, who must file, exemptions, and how to complete the process.

What Is BOI Reporting?

BOI reporting requires entities to disclose information about individuals who own or control the business. This transparency helps law enforcement detect and deter financial crimes.

Deadlines for BOI Reporting

Entities formed before January 1, 2024: File by January 1, 2025.
Entities formed in 2024: File within 90 calendar days after registration becomes effective.
Entities formed on or after January 1, 2025: File within 30 calendar days after registration becomes effective.

This is a one-time filing, but updates are required if:

Business information changes (e.g., address or ownership structure).
The initial filing was inaccurate (corrections must be made within 90 days).
The business becomes exempt.

Who Must File a BOI Report?

Most small and medium-sized companies need to comply. Two types of entities are required to file:

Domestic reporting companies: Formed by filing with a state’s secretary of state.
Foreign reporting companies: Formed abroad but registered to do business in the U.S.

Who Counts as a Beneficial Owner?

Beneficial Owners include individuals who:

Own or control 25% or more of the company.
Exercise substantial control, such as:
- Serving as a senior officer (e.g., CEO, CFO).
- Having authority to appoint or remove directors.
- Making key decisions for the company.

Who Is Exempt from BOI Reporting?

Entities that are: 1) not actively engaged in business, 2) do not own a subsidiary entity and, 3) have not sent or received funds exceeding $1,000 are exempt.

Additionally, large companies with the following characteristics are also exempt:

Over 20 full-time employees (in the U.S.)
$5 million in gross receipts during the prior year

For a complete list of 23 exempt entities, including banks, credit unions, and public utilities, visit the FinCEN FAQ page.

How to File a BOI Report

You can file your BOI Report by visiting the FinCEN filing portal. The process is straightforward, and there’s no fee for filing. You can either:

Download a PDF form, fill it out, and upload it; or
Complete the filing directly online.

FAQs About BOI Reporting

1. What happens if I miss the deadline?
Failing to file on time may result in significant fines or criminal penalties.

2. Can I file corrections?
Yes, corrections can be made within 90 days of the initial submission.

3. What information do I need to provide?
You’ll need the names, birth dates, addresses, and identification documents (e.g., driver’s license or passport) for all Beneficial Owners.