Beneficial Ownership Information Filing Requirement

Written By Chad Hathaway

As part of the Corporate Transparency Act, many U.S. businesses, including LLCs and corporations, must file a Beneficial Ownership Information (BOI) report. Here’s a quick guide to help you through the process.

 

Two-Step Check:

1.      First, is your entity a “reporting company?” This is defined as a corporation, LLC, or another type of entity formed by filing documents with a Secretary of State or similar office. Additionally, if your entity was established under foreign laws and has registered to operate in the U.S., it may also require BOI filing.

2.      Second, determine if your entity is one of the 23 types of exempt entities (see the listing below in the “Exemptions” section).

Key Deadlines:

  • If your business was formed before 2024, you must file by the end of this year.

  • Businesses formed in 2024 have a 90-day window after registration.

  • From 2025 onwards, you'll have 30 days post-registration to file.

Filing Made Simple:
Filing your BOI report is straightforward and can be done for free on the government’s website (https://www.fincen.gov/boi). The process typically takes around 15 minutes, making it quick for any business owner.

Practical Tips:

  • Prepare Your Information: Before you begin, gather essential details about your business's beneficial owners (typically defined as an owner who owns or controls at least 25% of the company or exercises substantial control over its operations). This includes names, addresses, and identification numbers. Having this information ready will streamline the filing process.

  • Utilize Available Resources: Already using services like LegalZoom? Check your account or contact them for any filing assistance they may be offering at no additional charge.

Potential Penalties:
Willfully violating BOI reporting rules can result in daily fines of up to $591, adjusted annually for inflation. Criminal penalties may include up to two years in prison and a $10,000 fine for not filing, filing false information, or failing to update ownership details.

Exemptions:
Certain organizations are exempt from filing the BOI report. These include large companies with more than 20 full-time employees, over $5 million in revenue, and an operating presence in the U.S., as well as those already heavily regulated, such as banks and credit unions. Below is the official list. Checklists for each of the 23 exemptions can be found here (https://www.fincen.gov/boi/small-entity-compliance-guide).

1          Securities reporting issuer

2         Governmental authority

3          Bank

4          Credit union

5          Depository institution holding company

6          Money services business

7          Broker or dealer in securities

8          Securities exchange or clearing agency

9          Other Exchange Act registered entity

10        Investment company or investment adviser

11        Venture capital fund adviser

12        Insurance company

13        State-licensed insurance producer

14        Commodity Exchange Act registered entity

15        Accounting firm

16        Public utility

17        Financial market utility

18        Pooled investment vehicle

19        Tax-exempt entity

20       Entity assisting a tax-exempt entity

21        Large operating company

22       Subsidiary of certain exempt entities

23       Inactive entity

Alerts

FinCEN posts alerts on their BOI webpage. As of this writing, two of the alerts relate to postponed reporting requirements for certain reporting companies impacted by recent hurricanes and the individuals and entities connected with the ongoing case of National Small Business United v. Yellen.

 

Taking proactive steps now can prevent future compliance issues. Make sure your business is ready to meet the BOI reporting requirements by the applicable deadline.

Chad Hathaway