BOI Reporting Requirements: Complete Guide

A federal district court in Texas suspended the Corporate Transparency Act (CTA) and its beneficial ownership information (BOI) reporting requirements on Dec. 3, 2024. However, the federal government is appealing this ruling.

In case the requirements are reinstated, businesses may consider preparing their ownership information even though they are not currently required to file BOI reports. The outcomes of this ruling affect most businesses in the U.S., so it’s crucial to stay informed of any changes.

The beneficial ownership report was set by the Department of Treasury's Financial Crimes Enforcement Network (FinCEN) as a way to clamp down on financial crimes like money laundering, the operation of shell companies, and other vague business structures.

Many companies in the U.S., including limited liability companies, corporations, and S corporations, could potentially be affected by this voluntary reporting requirement. Here's everything you need to know and what it means for your small business.

Introduction to BOI reporting 2025

The Federal Corporate Transparency Act (CTA) asks small businesses to voluntarily provide various details about themselves, their beneficial owners, and possibly even company applicants through the Beneficial Ownership Information Report (BOIR), commonly called the BOI report.

FinCEN manages beneficial ownership information in a centralized, non-public database. This data is accessible to law enforcement agencies, national security agencies, and financial institutions.

Overview of Beneficial Ownership Information Reporting

The CTA was launched in 2021 as a means to curb illicit financial transactions, such as tax fraud and terrorism financing, that impact national security and economic stability.

Certain legally registered companies can voluntarily disclose vital details about their business and beneficial owner(s).

According to the CTA, a beneficial owner can be:

• A person who has 25% or more ownership interest or control in the company, or
• A person who exercises substantial control over a company's finances, structure, and operations (like a manager, CEO, or COO).

Stock and equity shares, as well as voting rights, may be used to establish ownership interests.

Who might want to consider filing a BOI in 2025

Businesses that voluntarily report beneficial ownership information are known as reporting companies. Let's understand the criteria.

Determining reporting companies

There are two kinds of reporting companies—domestic and foreign reporting companies.
Domestic reporting companies are created under U.S. or Tribal law. This includes but is not limited to LLCs, corporations, and S corporations formed according to state statutes. If you have filed articles of organization or articles of incorporation with your Secretary of State or Tribal office, you would be classified as a domestic reporting company.

Also, if you created or registered your company by filing a document with a Secretary of State or similar office in one of the U.S. territories, such as Puerto Rico or the U.S. Virgin Islands, you would also be considered a domestic reporting company.

Foreign reporting companies are established under foreign country laws but are also registered to do business in the U.S. Any foreign business entity that has filed a document with a Secretary of State or similar office in the U.S. is classified as a foreign reporting company and would be required to report beneficial ownership information. A foreign reporting company can be a limited liability company or a corporation.

Exemptions and special cases

Currently, 23 types of legal entities are exempt from providing their beneficial ownership information. Among these are banks, credit unions, accounting firms, public utility companies, and certain large operating companies, which can bypass this compliance requirement.

FinCEN's Small Entity Compliance Guide includes a detailed list of all exempt entities. 

Understanding reporting company applicants

Only a domestic or foreign reporting company created or registered on or after Jan. 1, 2024, needs to provide company applicant details. A company applicant is the person responsible for filing the documents that lead to the company's creation with the appropriate state authority. If you submitted your LLC or C corp paperwork in person, via mail, or online, you would be considered the company’s applicant.

Company applicants:

• Must be an individual (can't list another legal entity or company).
• Can also be the beneficial owner.

If you used a third-party service to file your formation documents, the company applicant might be the actual employee who submitted your paperwork. Let's say you got a lawyer to register your LLC. You will list the lawyer's details under the company applicant section. However, you do not need to list employees of an automated formation service like LegalZoom.

Step-by-step guide to filing a voluntary BOI report

Filing the Beneficial Ownership Information Report (BOIR) involves critical steps that demand thorough preparation. FinCEN estimates that completing a company's beneficial ownership information report, from start to finish, can take between 90 to 120 minutes. To help you through this process, here is a step-by-step guide.

Step 1: Collect the required information

The voluntary BOIR report has to be submitted in real time. This means that you have one shot at completing it. Since the form can't be saved, make sure you have all the necessary information beforehand.

Company information. The report requests the business' legal name, DBA "doing business as" or trade name, physical address, federal taxpayer identification number (EIN), and jurisdiction where the company was created or registered.

An online service like LegalZoom can help if you urgently need an EIN.

Beneficial owner and company applicant information. Voluntary reporting companies should have the following information handy for each beneficial owner and company applicant:

• Complete legal name
• Date of birth
• Address
• An identification number from a government-issued ID such as a driver’s license or passport (foreign passports can only be used if no other form of ID is available).

You will also need to upload a clear digital copy of the non-expired identification document.

Step 2: Complete BOI report

Once you have gathered all your documents, head to the BOIR website and click "File BOI." You'll be asked to select a filing method: PDF or online. While both methods are available, online filing is generally recommended because it’s easy and convenient.

When you select the online filing option, you will be led to the main beneficial ownership information reporting form, which consists of four sections: Filing information, reporting company, company applicant(s), and beneficial owner(s).

Each section needs to be completed accurately. Let's break it down.

• Filing information. Select what type of report information you're filing. If this is your first time, pick "Initial Report."
• Reporting company information. In this section, provide information about the reporting company, such as legal name, trade name, and tax identification number that you've assembled during the prep work. You can opt to receive a unique FinCEN ID. This selection isn't mandatory, but it can streamline the reporting process. If you're a foreign pooled investment vehicle (FPIV), remember to select the box 4b.

Filing tip: If your business has multiple addresses, input the street address of the location where you receive the most important notices. If you have no physical U.S. address, you can use your registered agent's address.

Step 3: Submit the BOIR to FinCEN

Once all the fields are completed, you will proceed to the final stage—submission. It's a best practice to return to the other tabs and double-check all the information. After you have checked all the fields for accuracy, complete the following steps.

Enter the email address and full name of the person filing the form.

Select the "I agree" checkbox indicating that you certify that all information is accurate and complete. Selecting this box will validate all fields. The system will automatically display an error message if any required fields are missing or contain invalid entries. Go back and fix any highlighted errors and click on "I agree" again.

Complete the human verification box and select the appropriate images to verify you aren't a robot.

Select "Submit BOIR" to submit the form electronically.

If you use the PDF filing option, the submission process contains a few more steps. After entering all the requested information, do the following:

• Select the "Validate" icon to ensure all fields are completed correctly.
• Click on "Finalize" to lock in all the data. If you need to change anything, select the "Edit Report."
• Press the "Save" button to retain a copy of the report. This step will activate the "Ready to File" button.
• Click on the "Ready to File" icon to start the submission process. You will then have to provide the email address of the person filling the form and verify you're a human.
• Select "Submit BOIR" to submit the PDF.

Once the submission is completed successfully, you will see the "Submission Status Confirmation" page. If the submission is rejected, you need to resolve errors and submit the report again.

Whatever your chosen filing method (PDF or online), download a submission confirmation receipt for record keeping. Simply select "Download Transcript," and you'll instantly get a PDF copy of your transcript.

Common filing mistakes to avoid

The BOI report has a lot of fields, and it's easy to make a mistake. Here are some tips to ensure complete and accurate filing:

• Spell-check all names and addresses before hitting submit, as the system lacks spellcheck and address verification features.
• Don't use a P.O. Box as a business address. You have to use a physical street address.
• Upload documents in the right format and file size (under 5MB). Otherwise, they will fail to upload.
• Consider seeking legal counsel to identify every beneficial owner. Depending on your business's structure, there may be multiple beneficial owners. An attorney familiar with beneficial ownership information reports can help you identify all the beneficial owners.

If navigating the beneficial ownership information reporting form is too much of an administrative burden, you can utilize LegalZoom's BOIR Service. 

FAQs

Are there any exemptions to BOI reporting?

The FinCEN exempts 23 legal entities, like banks and tax-exempt organizations, from providing their beneficial ownership information. You can refer to FinCEN's exemption flowchart and checklist in its Small Entity Compliance Guide or consult an attorney.

What are the criteria for an inactive company?

As per the Corporate Transparency Act (CTA), an inactive company meets all the conditions listed below:

• Was created or registered before Jan. 1, 2020
• Has not engaged in any business activity or operations since Jan. 1, 2020
• Has not changed business structure
• Has not filed any tax returns since Jan. 1, 2020
• Holds no assets

You are exempt from BOI reporting if your company checks all the boxes.

What should I do if my company receives an exemption after filing a BOI?

If a domestic or foreign reporting company receives exemption status after it has filed its initial BOI report, it needs to file a quick update. To inform FinCEN about the exemption, simply log in to the BOIR's secure filing system, identify the entity, and select the box marked "exempt status."