The "beneficial ownership information" or BOI report is a filing requirement for most small businesses that started in 2024. This report has to be filed through the Financial Crimes Enforcement Network (FinCEN) and is the filing deadline is January 1, 2025 for companies created before January 1, 2024. Companies created or registered after January 1, 2024 have 90 days from their date of creation or registration. 

The purpose of this report is to provide financial integrity by identifying who owns or controls a business. The BOI requirement is part of a bipartisan Corporate Transparency Act, which was passed to help curb illicit finances and crack down on "shell companies" (corporation without active business operations or significant assets) that serve as a front for illegal and corrupt activities. 

Who has to file a BOI report?

The FinCEN website states that an entity is required to report beneficial ownership information if it is a "reporting company" and does not qualify for an exemption. 

Is my company a "reporting company"?

Based on U.S. laws, if your company is a corporation, a limited liability company (LLC), or was created by filing a document with a secretary of state or any similar office under the law of a State or Indian tribe, your company may be a domestic reporting company, thus requiring a BOI. 

Is my company exempt from the reporting requirements?

An entity that qualifies for any of the exemption types listed below is not required to submit a BOI report to FinCEN. 

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

What penalties can I face if I fail to file a BOI report?

A person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day the violation continues. In addition to the $500 per day penalty, a person who willfully violates the BOI reporting requirements may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Both individuals and corporate entities can be held liable for willful violations. 

If you are not sure whether or not your entity needs to file a BOI report, please contact us today and we will be glad to advise you. 

All information in this article was gathered from the Financial Crimes Enforcement Network's website. 

Small Entity Compliance Guide | FinCEN.gov 

BOI Small Compliance Guide v1.1