BOI Reporting for Business Owners

Tynisa (Ty) Gaines
ByTynisa (Ty) Gaines, EAReviewed byAlex MilesUpdated on December 27, 2024 · minute read
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  • The Corporate Transparency Act (CTA) mandates that certain businesses file Beneficial Ownership Information (BOI) reports to increase transparency and prevent financial crimes. Following the reversal of a court ruling, the reporting requirements are now back in effect.

  • Businesses subject to BOI reporting must comply with the original deadlines and requirements. Enforcement has resumed, and entities should ensure they meet reporting obligations to avoid penalties.

BOI reporting requirements are evolving, pending legislation. Visit the FinCen website to file and for the latest updates.

Corporate Transparency Act and BOI reporting reinstated after court ruling

In a significant turn of events, the Corporate Transparency Act (CTA), initially deemed unconstitutional by a federal district court in early 2024, has been reinstated following a successful appeal. This reinstates Beneficial Ownership Information (BOI) reporting requirements to combat money laundering and enhance corporate transparency.

The CTA, enacted on January 1, 2021, as part of the National Defense Authorization Act, mandates certain US businesses to disclose detailed information about their ownership structures. This requirement, which took effect on January 1, 2024, is overseen by the Financial Crimes Enforcement Network (FinCEN).

A federal court ruling in March 2024 temporarily halted the reporting requirements after the National Small Business Association, an Ohio-based non-profit, challenged the CTA's constitutionality.

In December 2024, an appellate court overturned the initial decision, affirming the law’s validity and reinstating the BOI reporting obligations. With enforcement back on track, businesses should comply with the CTA's requirements and adhere to filing deadlines to avoid penalties. For the latest, visit the FinCen BOI Newsroom.

What is the Corporate Transparency Act?

The CTA, enacted as part of the 2021 National Defense Authorization Act and codified under Title 31 of the US Code, mandates new reporting standards to enhance corporate ownership transparency and curb financial crimes.

Who needs to file BOI reports?

All entities registered in the US, including LLCs, corporations, and foreign entities registered with the Secretary of State, must comply with BOI reporting requirements.

BOI reporting exemptions

The CTA specifies 23 exemptions from BOI reporting:

  • Securities reporting issuer

  • Governmental authority

  • Bank

  • Credit union

  • Depository institution holding company

  • Money services business

  • Broker or dealer in securities

  • Securities exchange or clearing agency

  • Other Exchange Act registered entity

  • Investment company or investment adviser

  • Venture capital fund adviser

  • Insurance company

  • State-licensed insurance producer

  • Commodity Exchange Act registered entity

  • Accounting firm

  • Public utility

  • Financial market utility

  • Pooled investment vehicle

  • Tax-exempt entity

  • Entity assisting a tax-exempt entity

  • Large operating company

  • Subsidiary of certain exempt entities

  • Inactive entity

Defining inactive entities

An entity qualifies as inactive and is exempt from reporting if it:

  1. Must have been in existence on or before January 1, 2020. 

  2. Is not engaged in an active business. 

  3. Is not owned by a foreign person. 

  4. Has not experienced a change in ownership in the preceding 12-month period. 

  5. Has not sent or received funds in an amount greater than $1,000 in the preceding 12-month period. 

  6. Does not hold any type of assets, domestic or foreign.

How to determine beneficial owners

Beneficial owners are individuals who either:

  • Own more than 25% of the company

  • Exercise substantial control over the entity, such as senior officers

Required information for each beneficial owner includes:

  • Full legal name

  • Date of birth

  • Residential address

  • A unique identifying number from an accepted identification document

Reporting company information

Entities must disclose:

  • Legal and trade names

  • Principal business address

  • State or tribal jurisdiction of formation

  • Employer Identification Number (EIN)

Defining inactive entities for exemption

An entity qualifies as inactive and is exempt from reporting if it:

  1. Must have been in existence on or before January 1, 2020. 

  2. Is not engaged in an active business. 

  3. Is not owned by a foreign person. 

  4. Has not experienced a change in ownership in the preceding 12-month period. 

  5. Has not sent or received funds in an amount greater than $1,000 in the preceding 12-month period. 

  6. Does not hold any type of assets, domestic or foreign.

How to determine beneficial owners

Beneficial owners are individuals who either own more than 25% of a company or have significant control over its operations, including senior management.

What information is required for BOI reporting?

The required details for each beneficial owner include their full legal name, date of birth, residential address, and an identification number from an official document.

When to file a BOI report

BOI reporting deadlines have been updated due to a recent court injunction and ongoing litigation. These changes provide additional time for businesses to comply with filing requirements. Below are the updated deadlines based on different company registration dates and circumstances:

  • Companies created or registered before January 1, 2024: Must file their initial BOI reports by January 13, 2025.

  • Companies created or registered between September 4, 2024, and December 23, 2024: Originally due between December 3, 2024, and December 23, 2024, these companies now have until January 13, 2025, to file.

  • Companies created or registered between December 3, 2024, and December 23, 2024: Receive an additional 21 days from their original filing deadline to submit BOI reports.

  • Companies qualifying for disaster relief: Deadlines may extend beyond January 13, 2025, depending on the specific relief measures. Companies must follow the later applicable deadline.

  • Companies created or registered on or after January 1, 2025: Must file BOI reports within 30 days of receiving official or public notice of registration.

Penalties for non-compliance

Failure to comply with BOI reporting can result in fines of $500 per day, not exceeding $10,000.

For additional details and to file your BOI report, visit the official FinCEN website.

Beneficial Ownership Information (BOI) reporting FAQs

To stay up to date on the latest, follow TokenTax on Twitter @tokentax.

Tynisa (Ty) Gaines
Tynisa (Ty) GainesTax Expert at TokenTax
Tynisa (Ty) Gaines, EA has more than 20 years of experience as a tax professional. Ty has published numerous tax articles, two tax e-books, and an academic publication on cryptocurrency for the National Income Tax Workbook.
Alex Miles
Reviewed byAlex MilesCo-Founder at TokenTax
Prior to TokenTax, Alex worked as a Product Designer at Dropbox and before that Readmill (acquired by Dropbox). He holds a BS in Digital Information Design - Interactive Media from Winthrop University.

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