Beneficial Ownership Information Reporting
In 2021, Congress passed the Corporate Transparency Act (CTA) on a bipartisan basis. In September 2022, the Financial Crimes Enforcement Network (FinCEN) issued a final rule implementing the Corporate Transparency Act’s (CTA) Beneficial Ownership Information (BOI) report. Many companies are required to report information to FinCEN about the individuals who ultimately own or control them. The BOI reporting will enhance the ability of government agencies to protect national security and financial systems from illicit use and help prevent drug traffickers, fraudsters, and other criminals from laundering or hiding money in the United States.
The rule outlines who is required to file a BOI report, the information that must be provided, the reporting process, the timeline for reporting, the definition of a beneficial owner and a company applicant, as well as the penalties for violating the BOI reporting rules under the CTA.
The key components of the Corporate Transparency Act (CTA) Beneficial Ownership Information (BOI) reporting are listed below. For complete details on the CTA’s BOI reporting requirements, visit the official website at https://fincen.gov/boi.
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BOI Reporting Requirement
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Reporting Information
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BOI Reporting Process
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BOI Reporting Timeline
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Beneficial Owner
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Company Applicant
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Noncompliance with BOI Reporting
Who is required to file?
A. BOI Reporting Requirement
Many domestic and foreign entities are required to report beneficial ownership information to FinCEN:
- Domestic reporting companies include corporations, limited liability companies, and any other entities created by filing a document with a secretary of state or a similar office in the U.S.
- Foreign reporting companies are entities, such as corporations and limited liability companies, formed under foreign law and registered to do business in the U.S. by filing a document with a secretary of state or similar office.
Does either description (Domestic or Foreign) apply to your entity? Is your entity considered a Reporting Company? If so, and it does not qualify for an exemption, it must file a BOI report. If not, your entity likely does not need to file since it doesn’t meet the definition of a Reporting Company.
There are 23 types of entities exempt from the reporting requirements, including publicly traded companies that meet specific criteria, many nonprofits, and certain large operating companies. For more details, visit the official website at https://fincen.gov/boi.
What information must be reported?
B. Reporting Information
Reporting companies are required to submit information about their entity, beneficial owners, and company applicants.
Reporting about the reporting company: The following details must be provided:
- Full legal name
- Any DBAs, fictitious names, or trade names used to conduct business
- Principal U.S. business address
- Formation jurisdiction (state, tribal, or foreign) for domestic entities, or the first U.S. registration jurisdiction for foreign entities
- IRS Taxpayer ID number (TIN), including an EIN. If a foreign reporting company does not have a TIN, it can use a tax ID issued by a foreign jurisdiction, along with the jurisdiction's name.
Reporting about the beneficial owners: Reporting companies must submit:
- Full legal name
- Date of birth
- Complete residential street address
- Personal identification number and issuing jurisdiction from a non-expired U.S. passport, state driver’s license, or other government-issued ID
- An image of the identification document. If the individual does not have U.S.-issued identification, a foreign passport may be used.
Reporting about company applicants: This is only required for domestic and foreign reporting companies created or registered on or after January 1, 2024. A company applicant is an individual who directly files a company's formation or registration document with a U.S. state or tribal authority. If multiple individuals were involved, information must also be provided about the person primarily responsible for directing the filing.
For company applicants, the following information must be reported
- Full legal name
- Date of birth
- Complete residential street address
- Personal identification number and issuing jurisdiction from a non-expired U.S. passport, state driver’s license, or other government-issued ID
- An image of the identification document. A foreign passport may be used if other forms of ID are not available.
How and where to submit the report?
C. BOI Reporting Process
A reporting company required to submit its beneficial ownership information to FinCEN must file electronically through FinCEN’s secure BOI E-Filing system, available at https://boiefiling.fincen.gov.
The reporting form can be accessed directly on FinCEN’s BOI E-Filing website at https://boiefiling.fincen.gov.
When is the report due?
D. BOI Reporting Timeline
The due date for submitting a beneficial ownership information report depends on the creation or registration date of the reporting company.
- A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial beneficial ownership information report.
- A reporting company created or registered on or after January 1, 2024, and before January 1, 2025, will have 90 calendar days after receiving notice of the company’s creation or registration to file its initial BOI report. This 90-calendar day deadline runs from the time the company receives actual notice that its creation or registration is effective, or after a secretary of state or similar office first provides public notice of its creation or registration, whichever is earlier.
- Reporting companies created or registered on or after January 1, 2025, will have 30 calendar days from actual or public notice that the company’s creation or registration is effective to file their initial BOI reports with FinCEN.
FinCEN launched the BOI E-Filing website for reporting beneficial ownership information on January 1, 2024, available at https://boiefiling.fincen.gov. BOI reports are not required on a recurring basis; however, a reporting company must submit an updated report within 30 calendar days of any changes to the entity or its beneficial owners' information.
Who qualifies as a Beneficial Owner (BO) of the reporting company?
E. Beneficial Owner
A reporting company’s beneficial owner is any individual who either owns or controls 25% or more of the company’s ownership interests, or who directly or indirectly exercises substantial control over the entity. An individual is considered to have substantial control if they:
- Hold a senior officer position (e.g., CEO, CFO, COO, or another executive role with significant authority);
- Have the authority to appoint or remove senior officers or members of the board of directors or governing body; or
- Make, direct, or influence major company decisions.
Reporting companies must disclose all individuals who meet the definition of a beneficial owner, unless they qualify for an exemption from the reporting requirements.
Who is considered the Company Applicant (CA) of the reporting company?
F. Company Applicant
A company applicant is a person who physically or electronically files a business registration application with the state to form an LLC, Corporation, or other legal entity, or who files an application to register a non-U.S. entity to conduct business in the United States.
If more than one individual is involved in the reporting company’s formation filing process, both the person who directly filed the formation document and the individual who helped direct or control the filing must be included in the BOI report. Only domestic reporting companies created on or after January 1, 2024, and foreign reporting companies first registered to do business in the U.S. on or after January 1, 2024, must include their company applicants in their BOI report.
What penalties apply for failure to file?
G. Noncompliance with BOI Reporting
Civil Penalties Individuals who willfully violate the BOI reporting requirements may face civil penalties of up to $591 for each day the violation persists. This penalty amount is adjusted annually for inflation, and as a result, the daily fines can accumulate rapidly, leading to a significant financial burden.
Criminal Penalties More serious consequences include the possibility of up to two years of imprisonment and fines of up to $10,000.
We are here to assist you with BOI Reporting!
- If you’d prefer a DIY (Do It Yourself) approach, we can guide you through the reporting process so you can file the BOI reports yourself at this link (https://boiefiling.fincen.gov)
- If you're short on time or would rather not handle the preparation and filing yourself, we can act as your agent and file the report on behalf of your company.
Disclaimer The contents provided on this website regarding Beneficial Ownership Information Reporting are for informational purposes only and do not include all legal provisions. It is not intended as legal advice. For complete and up-to-date details on BOI Reporting, please visit the official website at https://boiefiling.fincen.gov or consult a legal professional.