New Beneficial Ownership Information (BOI) Reporting Requirements
As of January 1, 2024, the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) enacted new reporting requirements for entities to file a Beneficial Ownership Information (BOI) report.
This new process mainly applies to LLCs, S corporations, and C corporations. Qualifying businesses must report their BOI information as part of the Corporate Transparency Act’s (CTA) anti-money laundering efforts. FinCEN explains that the data is stored in a secure, non-public national database and used by national security and law enforcement agencies to “make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other ownership structures.”
While JLS Accounting provides general information below based on FinCEN’s mandate, we cannot provide technical or legal guidance on your BOI reporting. Please note that you are responsible for complying with the BOI reporting mandate and any other CTA requirements. We’ll be happy to chat with you for further questions and refer you to an attorney for legal assistance.
What Companies Must File a BOI Report?
The BOI reporting requirements primarily affect LLCs, S corporations, and C corporations created or registered through a secretary of state (SOS), also known as reporting companies. There are two types:
Domestic reporting companies formed through an SOS or similar office
Foreign reporting companies registered with an SOS or similar office
Who is a Beneficial Owner?
So, who exactly does the BOI report cover? Beneficial owners are individuals who either directly or indirectly:
Exercise substantial control over a reporting company, or
Own or control at least 25% of a reporting company’s ownership interests
They MUST be individuals—other entities, such as trusts or companies, aren’t considered beneficial owners.
What is considered substantial control?
Someone is considered to have substantial control if any of the following apply:
They are a senior officer (e.g., president, C-level executive, general counsel, LLC managers, general partners, board members, or any other officer who performs a similar function).
They can appoint or remove certain officers or a majority of the board of directors.
They are an important decision-maker.
Note that a person can be considered a beneficial owner even if they don’t have actual ownership in the company. You can learn more about what falls under substantial control in FinCEN’s Small Entity Compliance Guide.
Who is a Company Applicant?
Another term you’ll hear regarding BOI reporting is company applicants. You must report these individuals if you formed or registered your company on or after January 1, 2024.
You could have up to two individuals recognized as company applicants:
The person who files the document that creates or registers the company (e.g., founder, lawyer, or accountant)
The individual who is primarily responsible for directing or controlling the filing (if multiple people are involved)
Are Any Companies Exempt?
Yes, the full list of 23 types of entities exempt from the BOI reporting requirements is available here. These include organizations like financial institutions, nonprofits, and insurance companies, which already have strict reporting requirements that collect the same data.
Additionally, there is a “Large operating company” exemption, which applies to entities that:
Employ more than 20 full-time employees in the U.S.
Have a physical place of business in the U.S.
Reported gross revenue of $5M or more
Sole proprietorships, trusts, and general partnerships typically don’t have to file—as long as they were not created or registered with an SOS or similar office.
What Information Does the BOI Report Require?
BOI reporting collects identifying information for both the reporting company and the individual owners. The company must provide:
Its legal name
Any trade names, DBAs, or “trading as” names
The current address of its principal place of business (e.g., headquarters)
Its jurisdiction of formation or registration
Taxpayer Identification Number (TIN)
For every beneficial owner, a reporting company will have to collect:
The individual’s name
Date of birth
Residential address
An ID# from an acceptable ID document (e.g., U.S. driver’s license or passport) and the name of the issuing state or jurisdiction of the ID document, accompanied by an image of the document displaying the ID #
When Do I Have to File?
If you created or registered your company before January 1, 2024, you have until January 1, 2025, to file your first BOI report.
If you created or registered your business in 2024, you must file your first report within 90 days after receiving notice that your company’s creation or registration is effective.
Any reporting company created or registered after January 1, 2025, must file within 30 days of receiving notice that its creation or registration is effective.
How Do I File the BOI Report?
To file your BOI report, go to the BOI E-Filing System and use the FinCEN e-filing portal (there are no fees). Then, either fill out the online form or upload a PDF version of your completed report. The portal provides guidance so that most companies can submit their BOI themselves.
Do I Have to Report Updates?
Yes, if changes occur after filing your BOI report, you’ll need to submit an updated report within 30 days of the change. Examples include:
Changing the business name or address
Updating beneficial owners (e.g., adding/removing officers or changes in >25% owners)
Beneficial owner information (e.g., name, address, or ID #)
What if I Don’t Submit My BOI Report?
While filing your report may take some time and effort, skipping it is not worth the risk. Willful violation of BOI reporting requirements can result in civil penalties of up to $591 a day (as of when this article was written; this rate is adjusted annually for inflation).
You could even be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000 for violations like knowingly:
Not filing your BOI report
Filing false beneficial ownership information
Failing to correct or update previous beneficial ownership information
However, because FinCEN acknowledges that this is a new process, you can correct a mistake or omission within 90 days of the deadline for the original report to avoid being penalized.
JLS Accounting anticipates the new BOI reporting requirements will affect many of our clients. We’re happy to answer your questions where possible, and you can always book a call with us.
We also advise you to seek legal counsel for specific and technical assistance with completing your filing to ensure compliance. As with every new law, the situation and requirements will likely evolve, so stay tuned for updates!