The BOI requirements stem from the Corporate Transparency Act enacted on January 1, 2021, which aims to combat money laundering, terrorist financing, corruption, and tax fraud.
At REDW, we provide expert guidance on Beneficial Ownership Information (BOI) reporting obligations, helping you navigate any and all requirements with confidence.
Our team offers comprehensive support, including identifying filing exceptions, ensuring compliance, and accurately completing and submitting reports. These requirements apply to a wide range of entities—not just those filing tax returns—and may include Single Member Limited Liability Companies, Disregarded Entities, and similar organizations.
Let us simplify the process for you. Whether you need assistance with filing BOI or have questions, we are here to help.
FinCEN BOI References
Many companies in the United States must report information about their beneficial owners—the individuals who ultimately own or control the company—to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.
Filing is secure and free of charge. Beneficial ownership information reporting is not an annual requirement. Unless a company needs to update or correct information, a report only needs to be submitted once.
Companies required to report are called reporting companies.
Reporting companies may need to obtain information from their beneficial owners and report that information to FinCEN.
Your company may be a reporting company if it is:
1. A corporation or limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
2. A foreign company registered to do business in any U.S. state or Indian tribe by such a filing.
Twenty-three types of entities are exempt from beneficial ownership information reporting requirements, including publicly traded companies, nonprofits, and certain large operating companies.
FinCEN’s Small Entity Compliance Guide includes checklists for each of the 23 exemptions that may help determine whether your company qualifies for an exemption.
Exemption No. | Exemption Short Title |
---|---|
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 |
FinCEN’s Small Entity Compliance Guide includes this table and checklists for each of the 23 exemptions that may help determine whether a company warrants an exemption. Companies should carefully review the qualifying criteria before concluding they are exempt.
Companies that have more than one entity may benefit from REDW expertise in navigating these new reporting requirements.
The new BOI reporting form is now available for review and data entry. Businesses are encouraged to seek trusted guidance before filing.
Businesses will be able to obtain a FinCEN Identifier number that can be used to file their initial BOI and to provide updates or corrections regarding the ownership or dissolution of the business. Alternatively, the number can be obtained with the filing of the first report. While it is not currently required, an identifier can also facilitate submission of BOI reports by more than one individual.
The new FinCEN BOI reports require the collection and submission of information specific to everyone included in the report, including:
While ownership interest is simple to define, beneficial owners also include those who exercise substantial control over the company. The substantial control threshold is met by those who meet any of four criteria:
It’s important to note that parent companies may not file a single BOI on behalf of a group of companies.
Reporting companies can report beneficial ownership information electronically through FinCEN’s website for free, though companies that have more than one entity may benefit from REDW expertise in navigating these new reporting requirements.
Beneficial ownership information reporting is not an annual requirement. Unless a company needs to update or correct information, a report only needs to be submitted once.
FinCEN began accepting reports on January 1, 2024.
The Financial Crimes Enforcement Network (FinCEN) Beneficial Ownership Information (BOI) website provides the latest updates on regulatory changes. As BOI filing remains fluid, we believe it’s wise for businesses to be prepared, should the legal landscape shift and compliance become necessary. We will help you navigate these uncertainties with confidence and readiness. Start BOI preparation today!
As specified in the Corporate Transparency Act, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. However, this civil penalty amount is adjusted annually for inflation.
As of the time of publication of this FAQ, the penalty amount is $591. A person who willfully violates the BOI reporting requirement may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000.
Potential violations include:
FinCEN has learned of fraudulent attempts to solicit information from individuals and entities who may be subject to reporting requirements under the Corporate Transparency Act.
These fraudulent scams may include:
Information about FinCEN’s beneficial ownership information reporting requirements is available at https://www.fincen.gov/boi — This webpage includes a Small Entity Compliance Guide and responses to Frequently Asked Questions (FAQs) that can assist with your reporting questions.
You may also submit questions to FinCEN at https://www.fincen.gov/contact
Additional information on the Corporate Transparency Act can be found here: https://www.fincen.gov/boi/
Additional information on current customer due diligence requirements can be found here: https://www.fincen.gov/resources/statutes-and-regulations/cdd-final-rule.
File your report with the BOI E-Filing System