A Guide to BOI Report Filing

Starting January 1, 2024, many U.S. companies will be required to report their beneficial owners’ information to the Financial Crimes Enforcement Network (FinCEN), a U.S. Department of the Treasury bureau, under the federal Corporate Transparency Act (CTA). Beneficial owners are individuals who ultimately own or control the company.

In this guide, we’ll provide you with the information to help you understand and comply with these new regulations.

Who Needs to File the BOI Report?

Companies required to report are called reporting companies. Your company may be a reporting company if it is:

1. A corporation, Limited Liability Company (LLC), or other entity (such as a Limited Partnership or Limited Liability Partnership) that was created in the United States by filing a document with a secretary of state or similar office under state or Indian tribe law.
2. A foreign company registered to do business in any U.S. state or Indian tribe.

Who is Exempt from BOI Reporting?

Twenty-three types of entities, including publicly traded companies, nonprofits, and certain large operating companies, are exempt from BOI reporting requirements. Review Chapter 1.2 of FinCEN’s Small Entity Compliance Guide¹ to determine if your company qualifies for an exemption. The guide includes checklists for each of the 23 exemptions.

What is a Beneficial Owner?

A “beneficial owner” is any individual who, directly or indirectly, either exercises substantial control over a reporting company or owns or controls at least 25% of the reporting company’s ownership interests.

Substantial Control

An individual exercises “substantial control” over a reporting company if they meet any of the following criteria:

1. The individual is a senior officer.
2. The individual has the authority to appoint or remove certain officers or a majority of the reporting company’s directors.
3. The individual is an important decision-maker.
4. The individual has any other form of substantial control over the reporting company.

It’s important to note that an individual does not need to have an ownership interest in the reporting company to exercise substantial control. Additionally, there is no limit on the number of individuals who may be considered to exercise substantial control over a reporting company. An individual can exercise substantial control, directly or indirectly, through various means, such as contracts, arrangements, understandings, intermediary entities, or other relationships.

Ownership Interests

A “beneficial owner” also includes any individual who, directly or indirectly, owns or controls at least 25% of the reporting company’s ownership interests. A reporting company may have multiple types of ownership interests, such as:

• Equity
• Stock or voting rights
• Capital or profit interest
• Convertible instruments
• Options or other non-binding privileges to buy or sell any of the above
• Any other instrument, contract, or mechanism used to establish ownership

Determining a company’s beneficial owners can be complex, especially for larger organizations with complicated capital or governance structures or where interests are held indirectly through multiple tiers of entities or trusts. Due to the complexity and expansiveness of the relevant definitions and terms, many companies may require legal advice and guidance to accurately identify their beneficial owners.

BOI Reporting Deadlines

• If your company was created or registered prior to January 1, 2024, you have until January 1, 2025, to report BOI.
• If your company was created or registered between January 1, 2024, and December 31, 2024, you must report BOI within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.
• If your company was created or registered on or after January 1, 2025, you must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
• Any updates or corrections to previously filed beneficial ownership information must be submitted within 30 days.

Filing Process

If your entity is required to file the report, you should really only file the Beneficial Ownership Information Report (BOIR) through the FinCEN website. There are many companies that provide this filing, and while there are many good ones, there are many that are likely scams. Plus, it’s really easy to do yourself. Here are the steps:

1. Go to the FinCEN BOI e-filing platform.
2. Select the type of filing: “Initial,” “Correct Prior Report,” or “Update Prior Report.”
3. Enter the date.
4. Request a FinCEN Identifier (optional) to help you file the report easily in the future.
5. Provide basic company information, EIN, and contact information of all owners or controlling parties.
6. Provide proof of ID (license or passport) by uploading a JPG, PDF, or PNG image.
7. Submit the documents online.

Consult FinCEN’s filing instructions for more detailed information.

Fees

There is no fee for submitting your beneficial ownership information report to FinCEN.

1. https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide.v1.1-FINAL.pdf ︎