About BOI
Questions and Answers related to filing the BOIR with FinCEN.
1. What is the BOI report?
The BOI (Beneficial Ownership Information) report mandated by FinCEN (Financial Crimes Enforcement Network) is a regulatory requirement aimed at gathering information about the beneficial owners of legal entities, such as corporations or LLCs, to combat money laundering, terrorism financing, and other financial crimes.
2. Who is required to submit the BOI report?
The law that created the BOI report (commonly referred to as “CTA” or the “Corporate Transparency Act”) primarily targets smaller corporations, LLCs (Limited Liability Companies), and other similar entities that are created or registered to do business in the United States. If your company has fewer than 20 full-time employees or earns less than $5 million in annual revenue you may need to file.
3. What information is reported?
The BOI report typically requires information about the “beneficial owners” of the entity, including their names, addresses, dates of birth, and other identifying information such as a driver’s license or a passport.
4. What is a “beneficial owner”?
A beneficial owner is anyone who owns or controls at least 25% of the company OR exercises substantial control over the company. If the individual is a senior officer, has the authority to appoint or remove officers, is an important decision maker or exercises any other form of substantial control, they are deemed to have substantial control and will need to be listed on the form as well.
5. When is the deadline for submitting the BOI report?
There are three different groups with a different reporting deadline for each:
The company was formed prior to January 1st, 2024 - Deadline to file is January 1st, 2025
The company was formed during calendar year 2024 - Deadline to file is 90 days after the company was formed
The company was formed during calendar year 2025 and beyond - Deadline to file is 30 days after the company was formed
6. How does the BOI report help in combating financial crimes?
By collecting information about the beneficial owners of legal entities, the BOI report enhances transparency and accountability in the financial system, making it more difficult for criminals to hide illicit funds or conduct illegal activities anonymously.
7. What are the consequences of non-compliance with the BOI report mandate?
Non-compliance with the BOI report mandate can result in severe penalties including civil penalties of up to $500 for each day that the violation continues or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.
8. Are there any exemptions or exceptions to the BOI report requirement?
Entities from 23 different industries may be exempt from the filing requirement. These industries include:
Securities reporting issuers
Government authorities
Banks
Credit Unions
Depository institution holding companies
Money services businesses
Brokers or dealers in securities
Securities exchanges or clearing agencies
Exchange Act registered entities
Investment companies and investment advisers
Venture capital fund advisers
Insurance companies
State-licenses insurance producers
Commodity Exchange Act registered entities
Accounting firms
Public Utilities
Financial market utilities
Pooled investment vehicles
Tax-exempt entities
Entities assisting a tax-exempt entity
Large operating companies (more than 20 employees employed in the U.S., a physical office within the U.S., $5,000,000 or more in annual sales within the U.S.)
Subsidiaries of certain exempt entities
Inactive entities
9. Are there any ongoing compliance requirements?
If any of the required information on the report changes - including addresses of the company or its beneficial owners, driver’s license or passport information for the beneficial owners, etc. - the reporting entity must submit a report within 30 days of the change taking place.
10. Where can I find more information about the BOI report and its requirements?
If you have additional questions reach out - we have BOI experts ready to help you stay compliant with the BOI requirements.