Beneficial Ownership Information (BOI) Reporting

In September of 2022, the Financial Crimes Enforcement Network (FinCEN) issued a final rule implementing the bipartisan Corporate Transparency Act’s (CTA) beneficial ownership information (BOI) report. The rule 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 new rule describes who must file a BOI report, what information must be reported, and when a report is due. Specifically, the rule requires Corporations and Limited Liability Companies to file reports that identify the beneficial owners of the entity and the company applicants of the entity.

  • Key BOI reporting dates to be aware of:

    • FinCEN will begin accepting BOI reports on January 1, 2024

    • New businesses that are formed on or after January 1, 2024, must file within 90 days of business formation

    • Existing businesses that were formed before January 1, 2024, must file before January 1, 2025

Is every company required to file a BOI report?

Most registered business entities meet FinCEN’s definition of a “reporting company.” Reporting companies can be either domestic or foreign.

  • Domestic reporting companies are corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or with any similar office under the law of a state or Indian tribe.

  • Foreign reporting companies are entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe.

So, LLCs, C Corporations, S Corporations, and other types of corporations fit the definition. FinCEN doesn’t specifically mention them, but different entity types — such as Limited Partnerships, Limited Liability Partnerships, Limited Liability Limited Partnerships, and Business Trusts — might also be reporting companies.

Businesses, like Sole Proprietorships and General Partnerships, which do not register formation documents, do not have to file a beneficial ownership report.

Who is exempt from the reporting rule?

FinCEN has identified 23 exemption categories. If an entity is in one of those categories and meets its specific exemption criteria, it does not have to submit a beneficial ownership report. The exemptions are primarily for entities already under close regulation by the federal and state governments.

  • Securities reporting issuer

  • Governmental authority

  • Banks

  • Credit unions

  • Depository institutions holding company

  • Money services business

  • Broker or dealer in securities

  • Securities exchange or clearing agencies

  • Other Exchange Act registered entites

  • Investment companies or investment advisers

  • Venture capital fund advisers

  • Insurance companies

  • State-licensed insurance producers

  • Commodity Exchange Act registered entities

  • Public utilities

  • Financial market utilities

  • Pooled investment vehicles

  • Tax-exempt entities

  • Entity assisting a tax-exempt entities

  • Large operating companies

  • Subsidiary of certain exempt entities

  • Inactive entities

  • Public accounting firms registered in accordance with section 102 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7212)

Simply falling into any of these categories does not automatically make a reporting company exempt. Each category has specific criteria that must be met to qualify for exemption. Refer to FinCEN’s Small Entity Compliance Guide for details.