What you need to know about the beneficial ownership information report
Updated Feb. 26, 2025
On Feb. 19, 2025, the Financial Crimes Enforcement Network (FinCEN) announced that most companies under the Corporate Transparency Act (CTA) need to submit their Beneficial Ownership Information (BOI) reports by March 21, 2025. This follows a court ruling on Feb. 18, 2025, that cleared the way for enforcing the CTA. Learn more at our blog.
***
Updated Dec. 6, 2024
On Dec. 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction temporarily suspending enforcement of the Corporate Transparency Act (CTA) and its Beneficial Ownership Information (BIO) Reporting Rule. The injunction suspends obligations to file initial BOI reports by Jan. 1, 2025. Learn more at our blog.
Key takeaways
- The Beneficial Ownership Information (BOI) Report is simple to complete online.
- Businesses only need to file once, unless changes are made or a new entity is formed.
- Filing a BOI Report avoids potential civil and criminal penalties.
As of Jan. 1, 2024, many companies in the U.S. must report information about who owns or controls the company to the Financial Crimes Enforcement Network (FinCEN), part of the U.S. Department of the Treasury. Called the Beneficial Ownership Information (BOI) Reporting Rule, the law is designed to curb the use of businesses to hide illegal activity.
The BOI Reporting Rule states that all corporations, LLCs, or other legal business entities created in the U.S. by filing a document with a Secretary of State or similar office must file this new report unless otherwise exempt. Companies can file the report online using the BOI E-Filing System.
CWA Director of Compliance Jeremy Bolf says the simplicity of filing a BOI Report outweighs the impact of potential civil and criminal penalties for not filing.
“FinCEN has been tasked with a monumental effort to mitigate business ties to illegal activity while making the reporting process for companies as efficient as possible,” says Jeremy. “Compared to other government filings, the BOI Report is simple to complete online. Businesses only have to complete the report once unless changes to the BOI information occur.”
IMPORTANT DEADLINES
- For entities created on or before Dec. 31, 2023, the filing is due by Jan. 1, 2025.
- For entities created on or after Jan. 1, 2024, the filing is within 90 days of the new entity’s effective registration date.
- After Jan. 1, 2025, all reporting will have a 30-day deadline.
- Any changes to the information in the submitted BOI Report must be reported within 30 days from the date of the effective change in information.
FinCEN states there will be a 90-day grace period for missed filings. After that period, the business and owners could face civil and criminal penalties for willful violations.
EXEMPTIONS
Twenty-three types of entities, including large operating companies, are exempt from beneficial ownership information reporting requirements. To comply with the large operating company exemption, your business must have:
- More than 20 full-time employees
- A physical location in the U.S.
- More than $5 million in domestic gross receipts or sales as reported to the IRS the previous year
MEMBERS OF THE NATIONAL SMALL BUSINESS ASSOCIATION
A recent ruling from an Alabama Federal District Court on the CTA’s BOIR declared it unconstitutional. Please note that the ruling only applies to the plaintiffs in this case. The plaintiffs are the National Small Business Association (NSBA) and its members as of March 1, 2024. If you have been a member of the NSBA as of March 1, 2024, you can hold off on reporting until either December or a final judgment is made through the appeals process, assuming the entity is a pre-Jan. 1, 2024, formation. All new entities that are created and are owned by non-NSBA members, must still submit a BOI report within 90 days of the entity formation.
Accumulating Wealth Podcast Ep. 165, “It Has to Be Done”
In a recent Accumulating Wealth Podcast episode, hosts Hunter Satterfield and Judson Crawford shed some light on this new reporting requirement.
