BOI Reporting Requirements - An Overview

Updated on April 15, 2024 - 10:30 AM by Admin, TaxBandits

As per the Corporate Transparency Act of 2021, the Financial Crime Enforcement Network(FinCEN) mandates that all small companies and individuals of certain companies must file the Beneficial Ownership Information Report. The Beneficial Ownership Information Report(BOI) is a comprehensive report that outlines information about the business's structure and highlights the substantial control of a reporting company. This law was enacted to safeguard your company from illicit activities like money laundering, financial or terrorism, and serious tax fraud.

Read this article to learn more about what the reporting requirements are, what information is mandated for BOI filing, deadlines, and penalties.

Table of Contents:

  1. What is a BOI report?
  2. How do you determine if your company is a “Reporting Company”?
  3. What is a “Beneficial Owner”?
  4. What Information is Required on a Beneficial Ownership Information (BOI) Report?
  5. What is a “Company Applicant”?
  6. Is my business required to report Company Applicant information?
  7. When is the deadline to submit a BOI Report?
  8. Is there a penalty for businesses that fail to submit BOI Reports?
  9. Are any business entities exempt from submitting BOI Reports?
  10. Who is eligible for an exception from the definition of beneficial owner?
  11. Simplified BOI Reporting from TaxBandits

1. What is a BOI report?

The Beneficial Ownership Information (BOI) report, as implied by its name, is a document that furnishes information about the ownership structure of a business, including individuals who exert control over it. Often referred to as the BOI report, this disclosure is submitted by reporting companies to the Financial Crimes Enforcement Network (FinCEN).


2. How do you determine if your company is a “Reporting Company”?

As per the FinCEN, a reporting company falls under any of the following categories.

  • Domestic Entities
  • Foreign Entities

Dometic Entities

Domestic entities are businesses that were established by filing organizational documents with state authorities. In essence, these businesses operate under U.S. tax laws and include corporations, LLCs, limited partnerships, and limited liability partnerships (LLPs).

Foreign Entities

Foreign entities, though sharing similarities with domestic entities, differ in origin as they are established outside the United States. However, they are still required to file with relevant state authorities to conduct operations within the U.S.

If your business falls under either of these categories, it is mandatory to report Beneficial Ownership Information.

BOI Reporting Requirements

3. What is a “Beneficial Owner”?

As defined by FinCEN, a beneficial owner is an individual who either directly or indirectly:

  • Exercises control over the reporting companies.
  • Owns or controls at least 25 percent of the reporting company’s ownership interests.

Individuals who own or control at least 25% of the ownership interests in the reporting company

Individuals who own or take control of the reporting business directly or indirectly are considered business owners, and their information should be reported to FinCEN. Examples of this individual include stockholders, partners, LLC members, and owners of a business that holds ownership in another business subject to BOI reporting.

Individuals have control over the reporting companies

According to FinCEN regulations, reporting companies are also required to disclose individuals with substantial control over the company. Substantial control refers to those who, either directly or indirectly, influence or make significant business decisions or possess the authority to appoint or remove top executives.

This category includes roles such as president, CEO, CFO, General Counsel, and more. There is no restriction on the number of individuals reported for exercising substantial control.


4. What Information is Required on a Beneficial Ownership Information (BOI) Report?

Businesses are required to provide the following information on it’s BOI Report:

Beneficial Owner Details

  • Name
  • Address
  • Date of Birth
  • Unique ID number (e.g., Driving License or Passport number) for each beneficial owner

Business Information

  • Name of the business
  • Address of the business
  • Registered agent details
  • Tax ID number for the business

Type of BOI Filing

  • Specify whether it is an initial BOI filing, correction, or an update

Information for Newly Created Businesses

  • Businesses that have been established recently should include details about the company applicants in
    their report.
Click Here to know more about the BOI Filing Instructions.

5. What is a “Company Applicant”?

A company applicant is someone who submits the entity formation documents to the state or initiates the registration, filing, or application for a non-U.S. entity within the U.S. This individual could be the business owner or another party, such as a Certified Public Accountant (CPA).

For businesses required to report their company applicants, up to two individuals usually qualify:

  • The individual directly responsible for submitting the documents that establish or register the company.
  • If multiple individuals are involved in the filing process, this is the person primarily responsible for directing or controlling the filing.

6. Is my business required to report Company Applicant information?

Not all reporting companies are obligated to disclose company applicant details to FinCEN. The requirement applies solely to businesses established on or after January 1, 2024. Entities formed prior to this date are exempt from reporting company applicant information.


7. When is the deadline to submit a BOI Report?

FinCEN started accepting reports from January 1, 2024. However, the reporting deadline varies based on the establishment date of your company/entity:

  • For companies formed or registered before January 1, 2024, BOI reports must be submitted to FinCEN by January 1, 2025.
  • For companies established or registered after January 1, 2024, the report should be filed within 90 days from the date the business receives notice of its effective registration from the state.
  • For companies formed or registered after January 1, 2025, the deadline for filing a BOI report is within 30 days from the date the business receives notice of its effective registration from the state.

Businesses are required to submit the initial BOI report to FinCEN before the specified dates. Amendments are necessary in the event of any changes to the provided information, alterations in ownership, or corrections. Typically, amendment reports should be filed within 30 days of such changes.


8. Is there a penalty for businesses that fail to submit BOI Reports?

Certainly, FinCEN takes the reporting of BOI reports seriously, and non-compliance can result in significant consequences and penalties. There are three types of reporting violations that may incur penalties:

  • Willful Failure to File a Report
  • Providing False Information
  • Unauthorized Disclosure of Information

Failure to submit the required information can lead to civil or criminal penalties. Civil penalties may reach up to $500 for each day the violation persists, while criminal penalties can involve imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity failing to file a required BOI report may also be held accountable for the lapse.


9. Are any business entities exempt from submitting BOI Reports?

FinCEN identifies 23 specific types of businesses/entities that are exempt from reporting BOI. Please refer to the table below for details.

No Entities Exempt from BOI
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 An 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

10. Who is eligible for an exception from the definition of beneficial owner?

When a person would typically be a beneficial owner of a reporting company, then that company does not have to submit the beneficial owner information report to the FinCEN. The following individuals need not be reported as a beneficial owner:

  • Minor Child
  • Nominee, intermediary, or custodian
  • Employee
  • Inheritor
  • Creditor

11. Simplified BOI Reporting from TaxBandits

As a small business owner, it is crucial to fulfill your obligation by providing the required beneficial owner(s) information through BOI reporting. Ignoring this responsibility may expose you to serious penalties for non-compliance. Maintaining compliance is essential to safeguard your business.

To streamline the reporting process, you can submit the BOI report using TaxBandits. Our application has been designed to assist reporting companies with meeting their reporting requirements efficiently.

Stay proactive in fulfilling your reporting duties to avoid potential penalties and contribute to the transparency and integrity of your business operations.

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