How to File BOI for LLC: Step-by-Step Guide

On Dec. 3, 2024, a federal district court in Texas issued a nationwide order temporarily blocking enforcement of the Corporate Transparency Act (CTA) and its reporting requirements. As a result, businesses are not currently required to submit beneficial ownership information (BOI) reports.

An appeal has been filed by the federal government. Businesses may still consider gathering their ownership information in case the requirement is reinstated. 

Although reporting is not mandatory at this time, it's highly recommended that you stay informed about further developments.

In early 2024, the Corporate Transparency Act (CTA) launched the Beneficial Ownership Information Report (BOIR) for LLCs registered to do business in the U.S. This report is designed to help the Financial Crimes Enforcement Network (FinCEN) prevent illegal activities and financial crimes that threaten the country's economic fabric. 

This guide has the information you need to voluntarily file a beneficial information report for your LLC. We explain the report and details on how to file.

Introduction to beneficial ownership information (BOI)

The Federal Corporate Transparency Act introduced significant reforms to anti-money-laundering laws—the main one being beneficial ownership information (BOI) reporting. Beneficial ownership information refers to voluntarily providing accurate information about who actually owns or runs the legal business entity.

What is beneficial ownership information?

Certain businesses, including corporations and LLCs, can voluntarily identify individuals associated with the company. As defined by the CTA, a beneficial owner is any individual who owns or controls at least 25% of an LLC or exercises substantial control in any of the following ways:

• They serve as a senior officer, president, CEO, or general counsel.
• They have the power to appoint or remove senior officers, board members, and other similar roles.
• They make strategic decisions, such as deciding which markets or geographic areas the business will enter or exit.
• They make crucial financial decisions like approving operating budgets or deciding compensation for others.
• They have the authority to change or dissolve the business structure.

Understanding the Corporate Transparency Act

The Corporate Transparency Act requests that LLCs meeting certain criteria, known as "reporting companies," voluntarily provide beneficial owner information to the Financial Crimes Enforcement Network under the U.S. Department of the Treasury.

Congress initiated the CTA in 2021 to strengthen and secure the business environment while promoting transparency and increasing accountability. For instance, by knowing who truly owns and controls businesses, FinCEN can clamp down on the use of shell companies that run illegal activities.

Importance of filing BOI for LLCs

Beneficial ownership information reporting plays a vital part in enabling FinCEN to do its job. Only when the federal government has access to updated and accurate information about each company's beneficial owners will it be able to effectively investigate financial crimes, prevent money laundering and human trafficking, and protect fair-trade practices.

You might ask, "Why is this important for my company?" When your limited liability company voluntarily provides beneficial ownership information to FinCEN, you are being a responsible business owner doing your part in safeguarding the community and country. 

Who should consider filing a BOI Report?

LLCs that qualify as “reporting companies” can voluntarily report beneficial ownership information to FinCEN. Reporting companies include domestic and foreign (formed outside the U.S.) LLCs.

Criteria for reporting companies

Domestic reporting companies are limited liability companies formed by filing a document with a Secretary of State or any similar office under the state or Tribal law. If you established your LLC by filing articles of organization with your state's Secretary of State office, you'd be classified as a domestic reporting company.

Foreign reporting companies are LLCs initially formed in a foreign country and then registered to do business in the U.S. by submitting a document with the Secretary of State or similar government authority. If your LLC was initially formed in Germany and then registered to do business in Delaware, then you would be a foreign reporting company.

If your business meets either of the listed definitions, you might want to consider reporting your company's ownership interests unless you fall under an exemption. 

Exemptions from BOI filing

The CTA has a list of 23 business entities that are exempt from filing Beneficial Ownership Information reports. If your LLC satisfies one of the following requirements, you may be exempt from reporting requirements:

• Your LLC has more than 20 U.S. employees and over $5 million in gross sales.
• Your LLC is an inactive entity that was formed on or before Jan. 1, 2020.
• Your LLC is a public accounting firm registered under section 102 of the Sarbanes-Oxley Act of 2002.
• You have a nonprofit LLC or a tax-exempt entity.
• Your LLC is a member of the National Small Business Association.

The other exemptions apply to companies operating in heavily regulated industries like banking and insurance, publicly traded companies, and those registered under the Commodities Exchange Act.

If you're wondering, "Is my company exempt?" speak to a business attorney. They can help you carefully review the exemption criteria.

The role of beneficial owners

As stated earlier, a beneficial owner is an individual who has at least 25% of the reporting company's ownership interests or can exercise substantial control over the company's operations. Apart from equity, ownership interests can be established through shares of stock, voting rights, and capital or profit interests.

Every LLC will have at least one beneficial owner. If you run a single-member LLC, you are the beneficial owner. In multiple-member LLCs, the beneficial owner is anyone who meets the 25% ownership threshold or makes critical business and financial decisions. Here's an example: French Window LLC is a three-member LLC, where Member A has a 75% ownership stake, Member B has 20% ownership and serves as the company director, and Member C has 5% ownership. In this instance, Members A and B will both be beneficial owners based on ownership and control.

Beneficial owners can voluntarily provide vital details about themselves, such as their complete legal name and government-issued ID number, in the beneficial ownership report. Beneficial owners actively contribute to the overall goal of increasing transparency and combating financial crime when they fulfill their BOI reporting obligations. 

Step-by-step guide on how to file BOI for LLC

Effortlessly file the BOI for your LLC by using our detailed guide.

Collect beneficial ownership information

The BOI requests detailed information and documentation about your LLC, its beneficial owners, and possibly even company applicants.

A company applicant is the person who actually filed your LLC formation paperwork with the Secretary of State. If you utilized a formation service to register your LLC, the company applicant would be the formation company's employee who completed the paperwork.

Gather the following information for each beneficial owner and company applicant (if applicable):

• Legal name
• Date of birth
• Residential street address
• Identification number from an accepted document (non-expired passport or driver’s license)

Complete BOI Report form

To voluntarily start the online application process, go to FinCEN’s BOI reporting portal and select the "BOI E-Filing" option.

You will be led to a page where you can select your filing method—online or PDF. To use the latter option, your computer must have Adobe Acrobat Reader installed. While you can complete the PDF at your own pace, you'll have to go back online to submit it.

The voluntary online filing option is certainly more convenient, but it must be completed in one sitting. The system is not equipped to save answers you can return to later. FinCEN estimates the Beneficial Ownership Information Report can take anywhere between 90 to 120 minutes to complete, so ensure you have enough time on hand.

The beneficial ownership information form has four main sections: Filing, reporting company, beneficial owners, and company applicant. Each section needs to be completed accurately.

• Filing. Indicate what type of filing you are doing. If it's your first report, click on "Initial report."
• Reporting company. Enter the LLC's legal name, trade name ("doing business" as name), physical address, and federal tax identification number. If you need to get an EIN, LegalZoom can help.
• Company applicant. Fill in the required information for each company applicant (there can be a maximum of two). If your LLC was created before Jan. 1, 2024, you can skip this section by selecting box 16.
• Beneficial owners. This section is set up like the company applicant page. Complete the required details for each of the company's beneficial owners. Additional beneficial owners can be added by selecting the "Add beneficial owner" icon.

A substantial amount of data goes into a company's Beneficial Ownership Information Report. These tips will help ensure accurate completion and help you avoid common filing mistakes.

• Work with a legal professional to ensure you haven't missed identifying a beneficial owner. Their expertise can ensure a smoother filing process. 
• Spell-check all names and addresses before submitting, as the system does not have spell-check or address verification features.
• Don't use a P.O. Box as a business address. You must enter a physical street address.
• Have digital document copies ready in the right format and file size (under 5MB). Otherwise, they will fail to upload.

Submit the BOI Report

You can start the submission process once you're sure all the fields have been completed. To submit your online form, you'll first need to validate your answers. If there are errors like missing information, the system will highlight them so you can go back and fix them. After all is done, hit "Submit."

If you use the PDF form, you'll need to return to the BOIR filing page and select the "Submit PDF" option. The system will again ask you to validate your answers before you can officially submit the PDF.

After you submit your LLC's Beneficial Ownership Information Report, don't forget to download a submission confirmation. Select the "Download Transcript" button, and you'll get a PDF for your records. 

Although completing the forms may not be difficult, it's easy to miss something or make a mistake with everything you have to do as a small business owner. Having professional help on your side can give you peace of mind.

If you have a complicated LLC structure or multiple LLCs, consider consulting an attorney or accountant. They can ensure your form is completed per FinCEN’s standards.

FAQs on how to file BOI for LLC

Here are some of the most frequently asked questions on BOI reporting requirements.

How do I file a BOI Report?

You can voluntarily file the BOI online through FinCEN's filing platform. There are two filing options: A PDF or online. Set aside at least 90 to 120 minutes to complete the report and refer to our detailed steps for filing guidance.

If administrative paperwork isn't your strong suit, you can offload the filing to a BOIR filer. 

How much does it cost to file a BOI Report?

There are no costs for filing a BOIR directly through FinCEN’s website. There may be a slight cost if you decide to use a third-party service such as LegalZoom for filing purposes.