Beneficial Ownership Information reporting is a federal requirement for most small businesses. Here is what it covers and how to comply.
The Corporate Transparency Act requires most small businesses to file a Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network (FinCEN). The goal is to prevent the use of shell companies for money laundering and other financial crimes.
A beneficial owner is generally any individual who directly or indirectly owns 25% or more of the company, or who exercises substantial control over it (such as a CEO or managing member). For each beneficial owner, the report requires full legal name, date of birth, residential address, and an identifying number from a passport or driver's license.
Companies formed before 2024 had an initial filing deadline of January 1, 2025. Companies formed during 2024 had 90 days from formation. Companies formed on or after January 1, 2025 have 30 days. If any reported information changes—such as a new owner, a change of address, or a new identifying document—you must file an updated report within 30 days of the change.
Filing is done online through the FinCEN portal at no cost. It is a one-time report (with updates as needed), not an annual filing. However, the penalties for failing to file or filing false information are significant, so treat the deadline seriously.
Some entities are exempt, including publicly traded companies, banks, and certain regulated entities. Most small businesses, however, are not exempt. If you are unsure whether your business qualifies for an exemption, a consultation can help you confirm before the deadline.
This article is general educational information and is not legal, accounting, tax, or investment advice. Rules, limits, and thresholds change. Insurance products and availability vary by state, carrier, underwriting, and licensing. Coverage is not effective until approved and issued by the carrier. Consult our office for guidance specific to your situation.