The Beneficial Ownership Information (BOI) reporting requirements can be confusing, especially for small business owners navigating these complex regulations for the first time. But complying with the new reporting requirements is essential to avoid potential problems down the road.
Not filing when required could leave your business vulnerable if illicit actors were to exploit your company for illegal purposes and can result in penalties and even criminal charges. Let’s break down who needs to file a BOI report and help you better understand these requirements so you can make an informed decision.
What Is the Purpose of BOI Reporting?
The Beneficial Ownership Information (BOI) reporting requirements aim to provide transparency into who actually owns and controls private companies in the United States. While many businesses have nothing to hide, a lack of visibility into company ownership has enabled illicit activity and financial crimes.
By knowing who owns companies, law enforcement, and regulators can better detect and prevent criminal schemes that use shell companies to conceal identities and launder funds. If you represent the interests of a business, it is imperative to know whether you need to file a BOI report for your company.
Which Companies Must File BOI Reports?
Not all companies must file BOI reports. Certain exempted entities are not considered reporting companies, including some publicly traded companies, most financial institutions, investment funds, and specific non-profit organizations. There are 23 separate exemptions.
In general, under the Corporate Transparency Act, two types of companies may qualify as “reporting companies” required to submit beneficial ownership information to the Financial Crimes Enforcement Network, FinCEN.:
What Are the Exemptions?
Exempted entities are described in detail on the FinCEN website.
Here are just a few examples of the of companies and entities that may be exempt from filing a BOI report:
Who Qualifies as a Beneficial Owner?
A beneficial owner is any individual who directly or indirectly:
Reporting companies must provide identifying information to FinCEN about each beneficial owner, including their name, address, birth date, and identification number from an acceptable document like a driver’s license.
How to Determine If You Must File a BOI Report
To determine if your business is a reporting company required to file a BOI report, consider these questions:
If you answer “yes” to the first two questions and “no” to the last question, your company likely qualifies as a reporting company that must submit beneficial ownership information to FinCEN starting January 1, 2024.
Learn More About How FileForms Can Help Your Business with Filing A BOI Report
To ensure that its clients successfully and accurately fulfill filing and reporting requirements, FileForms offers expert advice and patented technologies. FileForms is a comprehensive filing tool for company reports and informational forms.
FileForms provides services for foreign bank account reports, annual reports, registered agent services, BOI reports, and reporting under the Foreign Account Tax Compliance Act.
If you need help filing a BOI report for your business, FileForms can help. Contact Us today.