BOI Reporting Requirements for Businesses
Executive summary: Corporate Transparency Act
On January 1, 2024, the Corporate Transparency Act went into effect requiring millions of businesses to file a Beneficial Ownership Information (BOI) Report with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). Failure to comply may result in criminal or civil penalties. Below we will discuss which entities are required to file and the reporting requirements.
Who is required to file?
A corporation, limited liability company, or other similar entity that is created by the filing of a document with a secretary of state, or similar office, is required to file. Further, any entity formed under the law of a foreign country and registered to do business in the United States is also required to file (e.g., single member LLCs, multi-member LLCs, partnerships, corporations, trusts, etc.)
There are 23 exemptions from the “Reporting Company” definition. See the footnote for exemptions.[i]
What information is required to be reported?
A reporting company must provide the full legal name, date of birth, the current residential or business street address, and a unique identifying number from an acceptable identification document (passport, driver’s license or other government issued identification document) or a FinCEN identifier for each beneficial owner.
If an exempt entity has a direct or indirect ownership interest in a reporting company, the reporting company must only report the name of the exempt entity.
Who is a Beneficial Owner?
Beneficial owners are individuals who directly or indirectly own or control 25% or more of the “ownership interests” of the reporting company or who directly or indirectly exercise “substantial control” over the reporting company.
When should the BOI Report be filed?
The filing deadline depends on when the business was formed.
- For businesses that were created before January 1, 2024, a BOI report should be filed by January 1, 2025.
- For businesses that were created on or after January 1, 2024, and before January 1, 2025, a BOI report should be filed within 90 calendar days of formation.
- For businesses that were created on or after January 1, 2025, a BOI report should be filed within 30 calendar days of formation.
Who can help me with this?
Please contact your legal advisor for compliance assistance. If you’re interested in self-reporting, the portal to self-report is https://boiefiling.fincen.gov/fileboir. The FINCEN website contains FAQs which may be useful. The FAQs can be found at https://www.fincen.gov/boi-faqs.
[i] The exempt entities are the following:
- Securities reporting issuer
- Governmental authority
- Bank
- Credit union
- Depository institution holding company
- Money services business
- Broker or dealer in securities
- Securities exchange or clearing agency
- Other Exchange Act registered entity
- Investment company or investment adviser
- Venture capital fund adviser
- Insurance company
- State-licensed insurance producer
- Commodity Exchange Act registered entity
- Accounting firm
- Public utility
- Financial market utility
- Pooled investment vehicle
- Tax-exempt entity
- Entity assisting a tax-exempt entity
- Large operating company
- Subsidiary of certain exempt entities
- Inactive entity
