Beneficial Ownership Information Report

What Is a Beneficial Ownership Information Report?

The BOI Report is a federal filing that gathers personal information on international businesses registered to do business in the United States (and the people in charge of them) in an effort to make financial crimes harder to hide.

The BOI Report is a federal filing that comes courtesy of the Corporate Transparency Act (CTA). Let’s go over what you need to know to stay in compliance.

Who Is Included in the Beneficial Ownership Report Information?

There are three parties you have to report on: the reporting company, the company applicants, and beneficial owners. Let’s figure out who that is for your business.

The Reporting Company
Your reporting company is the international business itself. You might call it a business entity, a company, that-place-I-would-really-like-to-take-a-vacation-from-but-oh-no-the-supplier-is-calling, or something else, but the CTA calls it a reporting company. Unless you qualify for a BOI exemption, this is your business.

The reporting company is just an international company registered to do business in the United States that has to report. Catchy, isn’t it?

The Company Applicant
Your company applicant is the non-U.S. citizen, or up to two individuals, who directed, drafted, and submitted your business’s registration documents with the state. This may be your organizer, but it may also be someone different.

For example, if you filed your own registration documents with the state, you are both the incorporator and the company applicant. However, if you hired a third party filing service to form your company for you, they are the incorporator, but you are likely still the company applicant.

This requirement is only for international businesses registered to do business in the U.S. on or after January 1, 2024. Businesses formed before the start date of BOI Reporting don’t need to submit company applicant information.

Beneficial Owner
Your company’s beneficial owner is any non-U.S. person with a financial hold of at least 25% or who has significant control over the business’s operations. If you’re business has a beneficial owner that is a citizen of the U.S., they do not have to be listed on your BOI Report. According to FinCEN, this includes individuals in the position of CEO, CFO, General Counsel, or anyone that has similar authority. You might have multiple beneficial owners, but there’s always at least one. Note: This might not be the same person who is the company applicant.

A business’s legal owner is usually the beneficial owner. But that’s not always the case. Particularly for larger corporations and businesses owned by public figures, there might be someone who acts as an owner of the business, even if they don’t own the majority control. This person might be the beneficial owner, despite not actually owning the business. This is one of the reasons FinCEN wants to demystify the business formation process.

Do All LLCs Have a Beneficial Owner?

Yes. A beneficial owner is a person who owns 25% of the business, or a person who makes the important business decisions or exercises significant control over the business. This means that every LLC will have at least one beneficial owner. U.S. citizens who are beneficial owners of an international business registered to do business in the United States do not need to be listed on the BOI Report.

Beneficial Ownership Reporting Exemptions

Since the purpose behind Congress’s CTA is to prevent financial crimes, there are reporting exclusions for businesses not deemed at risk. This is typically because there are already adequate reporting requirements for these types of businesses nation-wide.

Exempt entities include:

1. U.S. originated businesses
2. International businesses owned entirely by U.S. citizens
3. Tax-exempt entities
4. Large operating companies
5. Inactive businesses

There are 24 types of BOI Reporting exemptions specifically listed in the CTA. In general, a business is likely exempt if it:

• Is owned by U.S. citizens or permanent residents
• Originally formed within the United States or tribal territory
• Employs more than 20 employees on a full-time basis in the U.S.
• Filed last year’s federal income tax returns with over $5,000,000 in gross receipts or sales

Many of these businesses have reporting requirements that already give the necessary information to governmental offices or, such as the case of inactive businesses, do not move money through the business.

Which Beneficial Owners Are Exempt From Reporting?

Generally speaking, beneficial owners are required to submit their information to FinCEN. However, there are a few exemptions.

These include:

• U.S. citizens or permanent residents
• A minor child if parent or guardian information is reported
• Anyone who is a nominee, intermediary, custodian, or agent on behalf of another individual
• An employee of a reporting company in specified circumstances
• Anyone whose only interest in a reporting company is a future interest through a right of inheritance
• A creditor of a reporting company

Not sure if you qualify for exemption? Check with a business law attorney to confirm.

BOI Report Requirements

Essentially, if the information can be used to legally identify you, FinCEN is interested in it. Think about answering security questions for your bank—things only you should know.

If you are a company applicant or beneficial owner, you’ll submit your:

• Legal full name
• Date of birth
• Residential or business street address
• Personal identification document with unique identifying number. This requirement is limited to a valid state driver’s license, state ID, U.S. passport, or international passport.

Alternatively, you can file for a FinCEN Identifier, which is a new personal ID number used instead of the above information on your report.

Your business—the reporting company—files its:

• Legal name
• Any DBAs/trade names
• Street address
• Formation jurisdiction
• Taxpayer Identification Number, Social Security number, or Employer Identification Number (EIN)

Altogether, this information is meant to give FinCEN a way to check who runs your business and what that business does.

Where Is my Beneficial Ownership Information Sent?

BOI Reports are submitted on FinCEN’s E-filing system. This is where all the information in the reports will live.

In the Corporate Transparency Act itself, the internal system is called the Beneficial Ownership Secure System, or BOSS. It is a cloud-based, private government server. According to FinCEN, the database will have the highest FIMSA (or security) level possible. It is not accessible to the general public, unlike the state databases you might be more familiar with.

The only people who can see your report are:

• • Federal law enforcement agencies
  • State/local/Tribal law enforcement with a court order
  • Federal agencies on behalf of a foreign country with international agreement
  • Financial institutions for customer due diligence purposes with authorization from the reporting company

Remember, the goal is to stop financial crimes and terrorism. So while your information is available to be pulled, the actual data sharing is meant to be limited to people interested in sussing out those crimes.

When Is the BOI Report Due?

The BOI Report requirement is currently under review. The deadline for existing international businesses who have registered to do business in the U.S. before March 26, 2025, have until April 25, 2025 to file their BOI Report. New international businesses registering to do business in the United States after March 26, 2025 will have 30 days from their US registration to file.

What Happens If I Forget to File?

FinCEN has said they are enforcing the filing deadline for international businesses and the penalties are most likely what they were originally: a fine of $591 per day up to $10,000 for failure to file.

How Do I Get a Beneficial Ownership Report FinCEN ID?

A FinCEN Identifier Number is an unique identifying number available to individuals and reporting companies through FinCEN. You can use this number instead of submitting your personal information on your BOI Report. You can receive a FinCEN Identifier Number by submitting the same four pieces of information (legal name, date of birth, address, and an identifying document with unique identifying number) to FinCEN.

If you have multiple reporting companies and don’t want to share your information with each one, a FinCEN Identifier lets you give your reporting company all the information they need while still maintaining some privacy.

Your reporting company can also get a FinCEN Identifier, but not prior to the first BOI Report. It can be requested when you first file or any time after.