New Federal Reporting Requirement for U.S. Businesses: Understanding FinCEN’s BOI

In response to national security concerns, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) is requiring Beneficial Ownership Information reports (BOI) under the Corporate Transparency Act of 2021. 

What Businesses Need to file a BOI Report?

The BOI reporting requirement applies to new and already formed businesses. If your business was formed in the U.S., or is a foreign entity registered to do business in the U.S., then the information below may be relevant to you. 

Are Any Businesses Exempt from the Reporting Requirements? 

There are 23 exempt businesses from the BOI reporting requirement. Some of the more common exemptions are:

• Broker or dealer in securities; Investment company or investment adviser; venture capital fund adviser; accounting firm; tax-exempt entity; large operating company; inactive entity. Other exemptions are listed in C.2. of the Beneficial Information Reporting Frequently Asked Questions.

When Must the Information Be Reported?

Companies that are required to comply must file by the following deadlines:

• Reporting companies created or registered to do business in the United States before January 1, 2024, must file by January 1, 2025. 
• Reporting companies created or registered to do business in the United States in 2024 have 90 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective. 
• Companies created or registered to do business in the United States in 2025 and beyond must file within 30 calendar days of receiving actual or public notice that their company’s creation or registration is effective.

BOI reporting is not an annual requirement and there is no filing fee. A report only needs to be submitted once, unless the filer needs to update or correct information.

What Information Must Be Reported?

Beneficial Owners:

The following will need to be reported for all beneficial owners, defined as any individual who exercises substantial control over your company, and/or who owns or controls at least 25% of your company.

• Legal name, birthdate, address (usually, home address), and identifying number from a driver’s license, passport, or other approved document
• Alternatively, a FinCEN Identifier (see below) can be provided to cover the information above. 

Reporting Company:

For the company itself, the following information will need to be reported.

• Full legal name and any trade name or “doing business as” name, Complete current address, Jurisdiction of formation or registration, IRS Taxpayer Identification Number (TIN) (including an Employer Identification Number).  

Company Applicant:

For companies formed after January 1, 2024, you must also provide the FinCEN identifier for your company applicants (i.e. third party actors — lawyers and accountants — who are involved in registering your business with the state). Company applicants are individuals who file the document that creates or registers the company. Up to two company applicants per company can qualify as company applicants and will be determined as follows: the individual who directly files the document or first registers the company and, if more than two, the individual who is primarily responsible for directing or controlling that filing. 

What Is a FinCEN ID and How Do I Get One?

To simplify the reporting process, individuals and reporting companies may obtain a FinCEN Identifier. To obtain a FinCEN ID, they will need to provide the same information as listed above for beneficial owners as well as an image of the identification document. Access the online application for a FinCEN ID for detailed instructions and to apply.

How Do I File a Beneficial Ownership Information Report (BOIR)?

File the BOIR through the Financial Crimes Enforcement Network online portal system.

What Happens If I Don’t File a BOIR?

Significant civil and criminal penalties can apply for failure to comply with BOI reporting obligations. 

Beneficial Ownership Information Reporting Resources

Financial Crimes Enforcement Network BOI Beneficial Information Ownership Website

Financial Crimes Enforcement Network Summary Video:

Contact us today to discuss how we can help you navigate FinCEN’s new BOI Reporting Requirements.