Understanding the Beneficial Ownership Information (BOI) Reporting Requirements for Your Business
Learn MoreWhat’s Covered?
- What is BOI reporting?
- BOI reporting requirements
- What are the exemption codes?
- How TaxBandits simplify BOI reporting?
BOI Reporting Requirements - An Overview
Written by Stephanie Glanville
Stephanie Glanville is the Marketing Manager of TaxBandits. She has several years of experience with IRS tax forms and the funtionality of TaxBandits. With a passion to help business owners better understand their IRS tax forms and filing, she aims to create content that is valuable and informative.
As per the Corporate Transparency Act (2021), the Financial Crime Enforcement Network (FinCEN) mandates that most small businesses that operate in the U.S. file a Beneficial Ownership Information Report (BOIR).
In order to comply with this reporting requirement, it's essential to understand the key guidelines established by FinCEN.
Read this article to learn more about the reporting requirements, the information required for BOI reporting, deadlines, and penalties.
Table of Contents:
- What is a BOI Report?
- Who Must File the BOI Report?
- What Information is Required on a Beneficial Ownership Information (BOI) Report?
- Who is a Beneficial Owner?
- Who is a Company Applicant?
- When is the Deadline for BOI Reporting?
- What Happens if You File a BOI Report Late?
- Are There Exemptions to File BOI Reports?
- How to File a BOI Report?
1. What is a BOI report?
The Beneficial Ownership Information Report (BOI) is a legal requirement that requires small businesses in the U.S. to report details of their beneficial owners to FinCEN.
This law was enacted to prevent reporting companies from engaging in illicit activities such as money laundering, financial terrorism, and serious tax fraud.
FINCEN Facts!
According to FINCEN, an estimated 32.6 million small businesses are required to file a BOI report in 2024, and an additional 5 million businesses will file each year.
2. Who Must File the BOI Report?
According to FinCEN, your business will be considered a reporting company and must file a BOI report if it falls under any of the following categories.
-
Domestic Entities
Domestic entities are businesses established by filing organizational documents with state authorities. 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.
There are a few exceptions. Use our BOI Calculator to find out whether your business needs to file a BOI Report or not.
3. What Information is Required on a Beneficial Ownership Information (BOI) Report?
To complete the BOI report for your business, you must provide the following information:
1. Type of BOI Filing
Specify whether the report is an initial, correct, update, or newly exempt entity report.
2. Reporting Company Information:
Include the full legal name, trade name or DBA, TIN, address, and registered agent details.
3. Beneficial Owners Information:
Include the name, date of birth, residential address, and identification documents (e.g., state driver's license or passport) for each beneficial owner.
4. Company Applicant Information:
Include the name, date of birth, address, and identification documents (e.g., state driver's license or passport) for each company applicant.
4. Who is a Beneficial Owner?
As defined by FinCEN, a beneficial owner is an individual who either directly or indirectly:
- Has substantial control over a reporting company or
- Owns or controls more than 25% of the ownership interest over a reporting company
Click Here to learn more about the beneficial owners of the company.
5. Who is a Company Applicant?
A company applicant is an individual responsible for preparing and filing the documents needed to register the reporting company with the Secretary of State or a similar office.
A company can have a maximum of two company applicants, and legal entities or corporations cannot be considered as company applicants. If multiple individuals are involved in the filing process, the primary individual may be designated as the company applicant.
Note: Companies registered before January 1, 2024, are not required to report details about company applicants.
Click Here to learn more about Company Applicants.
6. When is the Deadline for BOI Reporting?
The deadline to submit the initial BOI report depends on your company's establishment date.
| Company Establishment Date | Deadline |
|---|---|
| Before January 1, 2024 | January 1, 2025 |
| Between January 1, 2024 - December 31, 2024 | Within 90 days from the date you received notice of the company’s effective registration from the state. |
| After January 1, 2025 | Within 30 days from the date you received notice of the company’s effective registration from the state. |
Note: In the event of any changes needed to the provided information, alterations in ownership, or corrections, you must file the corrected/updated reports within 30 days of such changes or when the mistake is noticed.
FREE BOI Reporting Due Date Checker
Choose your company's registered effective date, and our calculator will provide the BOIR due date for
your business.
7. What Happens if You File a BOI Report Late?
Your business will face significant consequences and penalties if it fails to comply with the BOI reporting requirements.
Click here to learn more about the FinCEN penalties for non-compliance.
8. Are There Exemptions to File BOI Reports?
Yes! FinCEN identifies that 23 types of entities are exempt from the BOI reporting requirements.
Click here to learn more about the 23 types of exemptions. You can also use our BOI Exemption checker to find out whether your business is exempt from reporting.
9. How to File a BOI Report?
There are two ways to file a BOI report:
- Submit a PDF BOI Report to FinCEN
- File Electronically
E-filing can be your way to go if you prefer a seamless experience and instant filing status. It simplifies the reporting process and ensures accurate and efficient submissions.
TaxBandits makes your BOIR filing easier. Our software has been designed with a user-friendly interface and intuitive features to make sure your BOI reporting is streamlined, secure, and accurate.
Click here to learn more about BOI filing using TaxBandits.