BOI Reporting – New for 2024

Beneficial Ownership Information reporting, or BOI reporting, is a crucial concept in understanding who ultimately owns or controls a company. This introduction to BOI reporting outlines the basics of beneficial ownership, including who is considered a beneficial owner and the requirements for reporting this information, aiming to enhance transparency and accountability in business operations.

Updates

Starting December 26, 2024, the injunction is back in place and reporting companies are not currently required to submit BOI information to FinCEN but may do so voluntarily. Find more BOI Updates here.

What is Beneficial Ownership Information? 

Beneficial Ownership Information (BOI) refers to identifying the individuals who directly or indirectly own or control a company. BOI Reporting, as the name suggests, refers to reporting information regarding the ownership of a company. 

Who are Beneficial Owners?

Beneficial Owners are individuals who either directly or indirectly:

1. Exercise substantial control over the reporting company
2. Own or control at least 25% of the reporting company’s ownership interests

What is considered substantial control? 

There are four different ways that an individual can exercise substantial control. An individual is considered to be exercising substantial control if they fall into any of the following four categories:

1. Senior Officer – The individual is a senior officer (president, CEO, CFO, etc.).
2. Has authority to appoint or remove – The individual has authority to appoint or remove other officers, directors, or similar officials of the reporting company. 
3. Important decision maker – The individual is an important decision maker in the reporting company.
4. Any other form of substantial control – The individual has another form of substantial control.

Which companies must report BOI? 

Companies that are required to report BOI are called reporting companies. There are two types: 

• Domestic reporting companies
• Foreign reporting companies

Domestic reporting companies

These are corporations, limited liability companies, and other entities created by filing a document with the secretary of state or similar office in the US. 

Foreign reporting companies

These are entities formed under the law of a foreign country that have registered to do business in the U.S. by filing a document with the secretary of state or similar office. 

Companies that cease to exist

Companies are not required to report BOI information if it ceased to exist as a legal entity before January 1, 2024.

If a company is created/registered in 2024, but later ceases to exist before its initial BOI due date, it is still required to report BOI information.

What information is required in a BOI report?

There is a variety of information that is required for BOI reporting. The information required also depends on when the company was created/registered. 

• On or after January 1, 2024 – If a company was created/registered on or after this date, then the reporting company must include information on the company, its beneficial owners, and its company applicants. 
• Before January 1, 2024 – If a company was created/registered before this date, then the reporting company must include information about the company and its beneficial owners. 

Reporting Company

A reporting company must report the following information about itself:

• Legal name
• Any trade names or “doing business as” names
• Current address of the principal place of business if it’s a U.S. address
  • If the principal place of business is outside of the U.S., then the current address that the business conducts business from within the U.S.
• Its jurisdiction of formation or registration
• Its Taxpayer Identification Number (TIN)
  • If a foreign company doesn’t have a TIN, then a TIN issued by a foreign jurisdiction and the name of the jurisdiction

Beneficial Owners

A reporting company must report the following information about its beneficial owners:

• The individual’s name
• Date of birth
• Residential address
• An identifying number from an acceptable identification document.
• An image of the identification document

Company Applicants

For companies created/registered on or after January 1, 2024, the reporting company must report the following information about its company applicants:

• The individual’s name
• Date of birth
• Address
• An identifying number form an acceptable identification document.
• An image of the identification document

If the company applicant works in a corporate formation, then the reporting company must use the company applicant’s business address. If not, then the company applicant’s residential address must be used. 

What is considered an acceptable identification document?

The following documents are considered acceptable identifcation documents for BOI reporting:

• A non-expired U.S. driver’s license (or driver’s licenses issued by a commonwealth, territory, or possession of the U.S.)
• A non-expired identification document issued by a U.S. state or local government, or Indian Tribe
• A non-expired passport issued by the U.S. government
• A non-expired passport issued by a foreign government
  • This can only be used if the individual does not have one of the first three forms of ID.

When is the deadline?

The deadlines for submitting BOI Reports have been extended to the following dates: 

• Entities created or registered before January 1, 2024: Initial BOI reports must be filed by January 13, 2025.
  • Originally these entities were required to submit their BOI reports by January 1, 2025.
• Entities created or registered on or between December 3, 2024 and December 23, 2024: Initial BOI reports must be filed within 111 days of their creation or registration date.
  • Originally these entities had 90 days to submit their initial BOI report, but were given a 21 day extension due to the temporary block.
• Entities created or registered on or after January 1, 2024 and before January 1, 2025: BOI reports must be filed within 90 days of their creation or registration date.
  • Originally these 
• Entities created or registered on or after January 1, 2025: Initial BOI reports must be filed within 30 days of their creation or registration date. 
• Entities that qualify for disaster relief may have extended deadlines.

Are there penalties for not competing a BOI report?

Yes, these are specified in the Coporate Transparency Act. if a person willfully violates the BOI reporting requirements, then they may be subject to civil penalties of up to $500 per day that the violation continues. 

They may also be subject to criminal penalties of up to two years imprisonment and fines up to $10,000. 

BOI reporting requirement violations include: 

• Willfully failing to file their BOI report
• Willfully filing false information on their BOI report
• Willfully failing to correct or update beneficial ownership information

Are there exemptions for BOI reporting requirements? 

Yes, there are 23 types of entities that are exempt from BOI reporting requirements. These include entities that are publicly trades companies that meet certain requirements, many nonprofit organizations, and certain large operating companies. 

These exemptions are as follows:

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

Key Takeaways

Understanding BOI reporting is essential for ensuring corporate transparency and compliance with legal standards. This overview has highlighted the importance of identifying and reporting the individuals who exercise significant control over companies. As regulations evolve, keeping abreast of BOI reporting requirements remains vital for businesses and their stakeholders.

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