You may have heard that your LLC must file a BOI report. But what does that actually mean? And are you really required to do it? In this article, we’ll go over the basics of BOI: what it is, who has to file the report, when, and how to file your report.
What is BOI for LLC
BOI stands for Beneficial Ownership Information.
It is a new regulation that requires certain businesses to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.
The BOI reporting requirement went into effect on January 1, 2024, as part of the Corporate Transparency Act (CTA).
The purpose of the BOI report is to help prevent money laundering, tax evasion, and other financial crimes by requiring businesses to disclose their beneficial owners. This increased transparency makes it more difficult for criminals to hide behind anonymous shell companies.
Who has to file BOI
Qualifications for beneficial owners
A beneficial owner is an individual who directly or indirectly owns or controls 25% or more of a company’s ownership interests. This can include individuals with substantial control over important decisions, such as senior officers or those making significant financial decisions.
Beneficial owners are required to provide their full legal name, birthdate, current address, and unique identifying number and issuing jurisdiction from an acceptable document—such as a driver’s license or passport.
Types of reporting companies
Under the BOI regulations, there are two types of reporting companies: domestic and foreign.
- Domestic reporting companies are entities created by filing a document with the Secretary of State or a similar office in any U.S. state or tribal jurisdiction.
- Foreign reporting companies are entities formed under the law of a foreign country and registered to do business in the U.S. by filing a document with the Secretary of State or a similar office in any U.S. state or tribal jurisdiction.
Exemptions to FinCen beneficial ownership report
Certain types of businesses are exempt from the BOI reporting requirements, including:
- Sole proprietorships
- General partnerships
- Companies with more than 20 full-time employees in the U.S., $5 million in gross receipts or sales, and a physical office in the U.S.
- Certain types of entities that are already heavily regulated, such as banks, credit unions, insurance companies, and publicly traded companies
PS: While sole proprietorships and general partnerships are exempt from BOI reporting, LLCs and corporations owned by sole proprietors or general partnerships may still be required to file.
FinCen reporting requirements for LLCs
LLCs formed prior to Jan 1, 2024
LLCs formed before January 1, 2024, that qualify as reporting companies must submit their initial BOI report by January 1, 2025. This deadline applies to all existing LLCs that meet the reporting company criteria, regardless of when they were formed.
LLCs formed after Jan 1, 2024
LLCs formed on or after January 1, 2024, that qualify as reporting companies must submit their beneficial ownership information reports within 30 days to 90 days of formation.
LLCs formed after Jan 1, 2025
For LLCs formed on or after January 1, 2025, the initial BOI report must be filed within 30 days of the company’s formation, just like those formed in 2024. After filing the initial report, all LLCs must submit updated reports within 30 days of any changes to the beneficial ownership information. This ensures that the information on file remains accurate and up-to-date.
Overview: Filing BOI report
What information is required
When filing your BOI report, you’ll need to provide the following information for each beneficial owner:
- Full legal name
- Date of birth
- Current residential or business street address
- Unique identifying number from an acceptable document (e.g., driver’s license, passport)
You’ll also need to provide the company’s name, address, and Tax Identification Number (EIN).
Where to file
BOI reports must be filed electronically through the Financial Crimes Enforcement Network (FinCEN) BOI Reporting Portal. The portal is accessible through the FinCEN website, and you’ll need to create an account to submit your report.
What to have on hand before you file
Before starting the filing process, gather all the necessary information for your company and its beneficial owners. This includes full legal names, dates of birth, addresses, and identifying document numbers. Having this information readily available will streamline the filing process and ensure accuracy.
Cost to file
There is no fee to file your BOI report with FinCEN. This makes compliance with the new regulations more accessible for all businesses.
Privacy
The information provided in your BOI report is not available to the public. However, FinCEN may disclose the information to law enforcement agencies, federal functional regulators, or other entities as specified by law. The purpose of collecting this information is to prevent money laundering, terrorist financing, and other illicit activities.
Penalties if you don’t file
Failing to file your BOI report or providing false information can result in civil and criminal penalties, including fines and potential imprisonment. Civil penalties can reach up to $500 per day until the report is filed, with a maximum of $10,000. Criminal penalties for willful violations can include fines up to $10,000 and imprisonment for up to two years.
To avoid these consequences, it’s essential to understand the BOI reporting requirements and deadlines, gather the necessary information, and file your reports in the right format and on time.
How to file beneficial ownership information report
Step 1: Gather information
Before beginning the filing process, beneficial owners need to collect all necessary information for your company and its beneficial owners, including:
- Full legal names
- Dates of birth
- Current residential or business street addresses
- Unique identifying numbers from acceptable documents (e.g., driver’s license, passport)
Ensure you have your company’s name, address, and Tax Identification Number (EIN) on hand as well.
Step 2: Create a FinCEN account
To file your BOI report, you’ll need to create an account on the FinCEN BOI Reporting Portal, which is accessible through the FinCEN website. Visit the FinCEN website and navigate to the BOI Reporting Portal. Click on the “Create Account” button and provide the required information, such as your name, email address, and a secure password.
You may also need to verify your email address by clicking on a link sent to your inbox. Now that your account is created, log in to the portal to begin the filing process.
Step 3: Complete the BOI report
Once logged in to the FinCEN BOI Reporting Portal, click on the “File New Report” button. The portal will guide you through the process of completing the BOI report. Enter your company’s information, including its name, address, and Tax Identification Number (EIN).
Next, provide the required information for each beneficial owner, such as their full legal name, date of birth, current address, and unique identifying number from an acceptable document.
Step 4: Review and submit the BOI report
Carefully review the information you’ve entered to ensure accuracy. Double-check names, dates, addresses, and identifying numbers to avoid errors that could lead to penalties. If you need to make any changes, navigate back to the relevant section and update the information.
Once you’ve verified that all the information is correct, click the “Submit” button to file your BOI report. You’ll receive a confirmation message indicating that your report has been successfully submitted to FinCEN, along with a unique identification number for your report.
After you submit your beneficial ownership information
Keep filed reports for records
After submitting your BOI report, it’s essential to keep a copy for your records. This will help you maintain accurate information and serve as a reference for future updates or changes. Store the confirmation message and the unique identification number for your report in a secure location, such as a dedicated folder on your computer or a physical file in a locked cabinet.
How to make an update or correction
If any beneficial ownership information changes after you file your initial report, you must submit an updated report within 30 days of the change. To do this, log in to your FinCEN BOI Reporting Portal account and click on the “Update Prior Report” button.
Locate the report you need to update using the unique identification number or other search criteria. Make the necessary changes to the beneficial ownership information, such as updating names, addresses, or identifying document numbers. Next, submit the revised report to FinCEN.
No annual reporting requirement
Unlike some other business filings, you do not have to report beneficial ownership information annually. You only need to file an initial report and update it when changes occur.
FAQS
What is a BOI in business?
BOI stands for Beneficial Ownership Information. It refers to the details about individuals who own or control a company, such as their names, addresses, and identifying documents. In the United States, companies are required to report this information to the Financial Crimes Enforcement Network (FinCen beneficial ownership form) to help prevent money laundering and other illicit activities. The BOI reporting requirement was introduced as part of the Corporate Transparency Act (CTA) in 2021. You can view the full Small Entity Compliance Guide here.
What is a BOI for an LLC?
For a Limited Liability Company (LLC), BOI refers to the same Beneficial Ownership Information that must be reported to FinCEN. This includes the personal details of any individual (or beneficial owners) who directly or indirectly owns 25% or more of the LLC or any individual with significant control over the company. The reporting requirements for LLCs are the same as for other types of companies under the Corporate Transparency Act.
Who has to file a BOI?
Most domestic and foreign companies formed or registered to do business in the United States must file a BOI report. This includes corporations, LLCs, and other entities, with some exceptions for larger companies, publicly traded companies, and certain regulated industries.
Garima Khatri is a freelance writer and content strategist for tech and fintech brands. Outside of work, you can find her exploring quaint coffee shops and binging on sci-fi series.