Owning a small business comes with many changes, whether it’s the needs of your target market or tax rules and other regulations. Keeping up with the evolving landscape of these rules and regulations is the responsibility of LLC owners, who must remain compliant for their businesses to stay open.

The federal government passed the Corporate Transparency Act, requiring business owners to file a new report called the Beneficial Ownership Information Report (BOI Report). The Financial Crimes Enforcement Network (FinCEN) is behind the 2024 law, which aims to help authorities crack down on financial crimes.

What is the new BOI reporting rule?

The new Beneficial Ownership Information, or Beneficial Ownership Rule, is a regulatory requirement introduced by the Financial Crimes Enforcement Network (FinCEN).

The rule states that any owner of a Limited Liability Company (LLC) needs to disclose information about the beneficial ownership, which means identifying any individuals with significant control over the LLC and any parties involved in the formation or registration of the business.

What’s the deadline to file?

The reporting deadline for BOI reports will depend on when the company was created or registered.

If an LLC or reporting company was formed on or before December 31, 2023, then their BOI must be submitted before January 1, 2025. 

If a reporting company is registered in 2024, the BOI report must be submitted within 90 days of receiving notice of the company’s creation or registration. Note that this has been extended from the original 30-day deadline. As of January 1, 2025, the deadline will become 30 days after receiving notice of the company’s creation or registration.

After filing, if there are any changes to a company or beneficial owner information, owners have 30 days from the date of the change to report it to FinCEN. The same applies for correcting any inaccuracies in the report.

The BOI report only needs to be submitted once, and in the case of changes, no annual or periodic updates required after the initial report.

Why was this rule created?

Simply put, the BOI rules are meant to combat money laundering, terrorist financing, and other illicit activities. It gives law enforcement officials and regulators access to information about businesses in their jurisdiction and resources to crack down on shell companies and illegal financial activity.

Under the Corporate Transparency Act (CTA) and the eCFR, FinCEN has been directed to conduct rulemaking to achieve the law’s goal while mitigating burdens on the reporting companies. This rule is intended to balance reasonable requirements for business owners with the value of BOI data for national security, intelligence, and law enforcement activities meant to safeguard the public.

An amendment has been made to change filing deadlines, but the content of the final rule remains the same.

Who is required to report BOI information?

The new BOI rule will be applied to all LLC and partnership LLC owners who operate in the United States and other similar entities. This can include any business that was formed by filing a document with a U.S. government office (like the Secretary of State) unless they are subject to an exemption.

Who counts as a beneficial owner?

According to the FinCEN rule, a beneficial owner is any individual who, either directly or indirectly, exercises “substantial control” of a reporting company or owns or controls at least 25% of the ownership interests/equity interests of said company.

For these purposes, substantial control can be defined in four ways:

  • A person who is a senior officer at the company, like CEOs or a similar office or similar function.
  • A person with the authority to unilaterally appoint or remove a senior officer or majority of the board of directors.
  • A person who directs, determines, or has substantial influence over important decisions made by the reporting company and its stakeholders.
  • A person with any form of substantial control over the reporting company.

If you are unsure about who is considered a beneficial owner rule, reference FinCEN’s Small Entity Compliance Guide for more details.

Who is exempt?

There are 23 total categories of exclusions that relieve a company from the BOI requirement. You can find a table listing these exemptions on the FinCEN website.

Some of the most common include:

  • Companies that employ more than 20 full-time employees in the United States, have more than $5,000,000 in receipts or sales in the US and have a physical office within the United States. Assets and operations in a foreign country do not qualify.
  • Publicly traded companies.
  • Companies that are tax-exempt in categories under the 501(c) code from the Internal Revenue Service (IRS).
  • Entities involved in private equity or venture capital, like investment companies or pooled investment vehicles.
  • The subsidiaries of already exempt holding companies, like such entities above.
  • Certain regulated entities, like insurance companies, accounting firms, banks and credit unions, or brokers.

If a company is exempt, there is no requirement to file any BOI information through the FinCEN. Be sure that your company and any legal entity within its structure are exempt before foregoing the process.

What’s the process to file the report?

If your LLC is required to file this report, you’ll do so through FinCEN BOI e-filing platform. You’ll create an account, fill out paperwork, and submit it electronically. More specifically, here’s how you’ll file the report:

  1. Go to FinCEN BOI e-filing platform
  2. Select the type of filing, which is either “Initial,” “Correct Prior Report,” or “Update Prior Report”
  3. Enter the date
  4. Request to receive a FinCEN Identifier. You can choose to receive an ID number to help you file this report easily in the future. If you opt for a FinCEN ID, you’ll receive it via email after your submission.
  5. Provide basic company information, EIN, and contact information of all owners or controlling parties.
  6. Provide proof of ID. You’ll need to provide a picture of your license or passport. You’ll upload the image to the platform. It must be a JPG, PDF, or PNG.
  7. When complete, submit the documents online.

If you’d like more detailed information about the report, review the filing instructions from FinCEN.

What information is required in the BOI Report?

As you can see from the steps listed above, company applicants are asked for personal and business information, along with the contact information of all owners and controlling parties. Here’s a closer look at the information you’ll provide for the report.

Company information

  • Full legal name, which includes any trade name or “doing business as” name
  • Complete current street address, not a P.O. box
  • Jurisdiction of formation, including state or tribal jurisdiction
  • Taxpayer Identification Number, which can be an EIN, SSN, or ITIN

Owner information

  • Full legal name, along with any former names, maiden names, or aliases
  • Date of birth
  • Complete current address, not a P.O. box
  • Unique identifying number, which is found on an ID, like one of the following: (1) U.S. passport; (2) identification document issued by a State, local government, or Indian Tribe issued for the purpose of identifying the individual; (3) State-issued driver’s license; or (4) if none of (1)–(3) are available, a foreign passport. You’ll upload an image of this document.


What is the new BOI reporting requirement?

FinCEN’s new BOI reporting rule requires that all LLCs, and other reporting companies, submit information on their beneficial owners. The information can then be used to prevent money laundering and other financial crimes.

What is a beneficial owner?

A beneficial owner is an individual who, directly or indirectly, owns or controls 25% of the ownership interests of a reporting company. It can also be someone who exercises substantial control over the entity, regardless of ownership interests.

When do I need to file a BOI report?

For companies formed before 2024, BOI reports are due before January 1, 2025. Companies formed in 2024 have 90 days to file. Starting in 2025, new companies will need to file within 30 days of formation.

What is the beneficial ownership rule for an LLC?

The BOI report applies to LLCs, which means the LLC owner must file a report with FinCEN that provides company information and information of all owners.

Is my BOI report information secure?

FinCEN will store the information in a secure, non-public database with rigorous security measures. This beneficial ownership secure system is accessible by authorized law enforcement agencies, intelligence agencies, and some covered financial institutions.

Do all states have to file a BOI report?

Yes, the BOI reporting requirement is enforced under federal government regulations. The Corporate Transparency Act, which is upheld by the BOI requirement, is used by the Department of the Treasury to ensure public safety.

Do all entities have to file a BOI report?

The BOI reporting rule applies to LLCs and other similar entities, including some corporations. Sole proprietorships and general partnerships do not have to follow this regulation.

How do I request a FinCEN Identifier?

You can check a box to obtain a FinCEN ID number as you file the report. By doing so, you’ll be able to enter the number in the future, which limits the amount of information you have to enter manually.

Who can be held liable for violating BOI reporting requirements?

If you fail to file the report and comply with the new rule, the company and its owners could face civil penalties of up to $500 per day for ongoing violations and could face criminal penalties of up to two years in prison and a fine of up to $10,000.

How does the beneficial ownership rule impact financial institutions and their due diligence processes?

As a result of the BOI rule, financial institutions must enhance customer due diligence when opening new accounts by obtaining information that’s similar to that asked on the BOI reports.