Beneficial Ownership Information Reporting

In 2021, Congress enacted the Corporate Transparency Act, a controversial law aimed at enhancing transparency within the business landscape. This act established a new Beneficial Ownership Information (BOI) reporting requirement as part of the U.S. government’s ongoing efforts to combat illicit financial activities and increase accountability, particularly in relation to shell companies and obscured ownership structures.

Starting in 2024, many small businesses must report their beneficial owner(s) − individuals who possess ownership or exercise control over the business − to the Financial Crimes Enforcement Network (FinCEN), an agency within the U.S. Department of Treasury.

Who must report?

Your business may be required to file a BOI report if it meets one of the following criteria:

  • A corporation, limited liability company (LLC), or other business entity registered with your state; OR
  • A domestic or foreign corporation, LLC, or other business entity with fewer than 20 U.S. employees and less than $5 million in gross receipts or sales.

Who is exempt?

FinCEN has provided a list of 23 exemptions that apply. These entities include publicly traded companies, tax-exempt not-for-profits, and certain large operating companies. A full list of exempt companies is available on FinCEN’s FAQ page.

What constitutes a beneficial owner?

A beneficial owner is any individual who owns at least 25% of a company or has “substantial control” over it — which could include senior officers, key decision-makers, or individuals with authority to appoint and remove officers.

When are the reports due?

  • If your business was registered before January 1, 2024, you will have until January 1, 2025, to file a report.
  • If your business was registered on or after January 1, 2024, and before January 1, 2025, you must file a report within 90 calendar days of receiving confirmation of your corporation’s incorporation or organization of your LLC or partnership.
  • If your business registers after January 1, 2025, you must file a report within 30 calendar days of receiving confirmation of your corporation’s incorporation or organization of your LLC.
  • If you have updates or corrections to previously filed BOI reports, you must submit them within 30 days.

What are the consequences of non compliance?

Failure to comply with reporting requirements may result in substantial fines and penalties. Deliberate violations may incur civil penalties of up to $500 per day and criminal penalties of up to two years imprisonment along with fines up to $10,000.

What is the next step and how do I sign up?

Contact us to set up an appointment.

We estimate our fees to be $550 per entity per single beneficial owner and $150 for each additional beneficial owner.

Are some companies exempt from the reporting requirement?

Yes, 23 types of entities are exempt from the beneficial ownership information reporting requirements. These entities include publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies.

The following summarizes the 23 exemptions:

  • Securities reporting issuer
  • Governmental authority
  • Bank
  • Credit union
  • Depository institution holding company
  • Money services business
  • Broker or dealer in securities
  • Securities exchange or clearing agency
  • Other Exchange Act registered entity
  • Investment company or investment adviser
  • Venture capital fund adviser
  • Insurance company
  • State-licensed insurance producer
  • Commodity Exchange Act registered entity
  • Accounting firm
  • Public utility
  • Financial market utility
  • Pooled investment vehicle
  • Tax-exempt entity
  • Entity assisting a tax-exempt entity
  • Large operating company
  • Subsidiary of certain exempt entities
  • Inactive entity