Corporate Transparency Act Beneficial Ownership Information Reporting is now open to business entities formed in U.S.

A Complete Guide to BOIR

For many business owners, the hardest part of meeting new legal requirements is understanding exactly what you need to do. If you’ve tried to file a Beneficial Ownership Information Report (BOIR) for your business yet, you might be wondering:

FinCEN’s rules for BOI Reporting might look simple at first. However, the list of people your company needs to report may be longer than you think. 

In this guide, we break down everything you need to know about BOIR so your business can fully comply with the Corporate Transparency Act and avoid penalties.

What is Beneficial Ownership Information Reporting (BOIR)?

Beneficial Ownership Information Reporting, or “BOIR”, is a federal legal requirement that businesses operating in the U.S. need to complete. BOIR was introduced in 2024 as part of the Corporate Transparency Act (CTA)

The CTA requires LLCs, corporations and other entities to submit Beneficial Ownership Information (BOI) Reports to the Financial Crimes Enforcement Network (FinCEN). BOI Reports disclose details about a company’s significant owners and important decision makers. More specifically, BOI Reports contain personal information about a company’s beneficial owners, substantial control parties and company applicants. 

Reporting companies need to submit Initial BOI Reports to FinCEN before specific deadlines to comply with the CTA. Additionally, companies need to keep their beneficial ownership information up to date and notify FinCEN whenever any information changes. 

Which Companies Need to File BOIR?

Nearly all LLCs, corporations and limited partnerships in the U.S. need to file a BOI Report with FinCEN and comply with the Corporate Transparency Act. FinCEN calls businesses that need to file BOI Reports “reporting companies”

Here’s a list of entities that need to report BOIR:

  • Limited liability companies (LLCs),
  • Corporations,
  • Limited partnerships (LPs),
  • Series LLCs,
  • Public Benefit Corporations
  • Statutory business trusts,
  • Foreign companies registered in the U.S., and
  • Any entity created by a public filing. 

The CTA impacts any legal entity formed through a public filing with a government office in the U.S. Typically, these filings are made with a Secretary of State’s office. This includes foreign companies formed in other countries that are registered to do business in the U.S. 

Who Needs to Be Reported for BOIR?

BOI Reports require information about a reporting company’s significant owners and important decision makers. You need to report the following types of people involved in your company: 

  • Beneficial Owners – Anyone who owns at least 25% of the company, or has substantial control over the business. 
  • Company Applicants – The people most involved in forming the company with the state. 

Let’s dive deeper into what these terms mean: 

Who are Beneficial Owners?

Beneficial owners include a company’s significant owners and important decision makers. More specifically, a beneficial owner is anyone who owns or controls 25% or more of the ownership interest or has substantial control over the company. 

Beneficial owners in a corporation typically include:

  • Shareholders who own at least 25% of company stock,
  • All senior officers, and
  • The board of directors.

Beneficial owners in an LLC typically include:

  • LLC Members with at least 25% membership interest, and
  • LLC Managers who can act on behalf of the company.

What is Substantial Control?

FinCEN uses the term “substantial control” to refer to certain responsibilities that are crucial to a company’s business strategy. People with substantial control include a company’s senior leadership and any managers who act on behalf of the company. 

Said simply, substantial control is a “catch-all” term that FinCEN uses to include anyone who has a say in how your business is operated. You need to include these individuals in the company’s BOI Report. 

Who are Company Applicants?

New companies formed on or after January 1, 2024 need to include their company applicants in their BOI Report. Company applicants are the individuals who are most involved in the process of forming a company. 

A reporting company can have up to two company applicants according to FinCEN’s rules.
The 1st company applicant is the person who orders a company to be formed. The 2nd company applicant is the person who directly filed the company formation documents with the Secretary of State’s office.

The company applicant can be just one person. This is the case if a business owner files their company formation documents without the help of a lawyer or an incorporation service. 

What Information Do You Need for BOIR?

Beneficial Ownership Information Reports require personal details about each of your company’s beneficial owners. They also require specific information about the reporting company itself. Here’s exactly what information need to provide in a BOI Report: 

For the each beneficial owner, you need to report:

  1. Their full name,
  2. Date of birth, 
  3. Current residential address,
  4. The unique ID number from a valid identification document, and
  5. A photo of a valid identification document. 

Valid ID documents for BOI Reports include non-expired U.S. driver’s licenses, non-expired U.S. and foreign passports, and non-expired U.S. state, local or tribe-issued IDs.

For the reporting company, you need to report: 

  1. The company’s full legal name, 
  2. Jurisdiction of formation (where the company was formed),
  3. A principal business address in the U.S., and 
  4. The U.S. federal tax ID number. 

What are the Deadlines for BOIR?

Companies need to submit their BOI Reports to FinCEN before specific deadlines to comply with the requirements. These deadlines depend on the date when the company was formed:

New Companies Formed in 2024 have 90 Days to File BOIR

If you formed your company on or after January 1, 2024, you have 90 calendar days to submit your BOI Report to FinCEN. The countdown starts after you receive official notice from the Secretary of State that your entity has been formed. 

Existing Companies Need to File BOIR by December 31, 2024

If you formed your company before January 1, 2024, you need to file the Initial BOI Report by December 31, 2024. Your report will be considered late after this date, and FinCEN can begin to charge you with penalties. 

How Do I Find My Company Formation Date?

Your company’s formation date should be stamped on the official formation document that was filed with the Secretary of State’s office. This formation document can have different names depending on the entity type and the state, like: 

You can also find your company’s formation date online on the Secretary of State’s website. Look up your company name in the state’s public entity record, and you should be able to find the formation date and the original formation document. 

When Do I Update My BOI Report?

Reporting companies need to submit Updated BOI Reports to FinCEN whenever any information included in a previous report changes. You need to update FinCEN within 30 calendar days any time a piece of information changes. 

Here are some examples of changes that would require you to file an Updated BOI Report:

  • A beneficial owner changes their residential address,
  • The company changes their principal office address,
  • There is a change in company ownership or senior leadership,
  • A beneficial owner gets a new ID document with a different identifying number, or
  • The company changes its state of formation or incorporation. 

Business owners should have a system in place to track changes in beneficial ownership information so they can submit updates before the 30 day deadline. 

Does My Company Need to File a BOIR Every Year?
No, you do not need to file a BOI Report for your company every year. BOIR is not an annual requirement. However, you do not need to file updated reports any time the information you included in a previous report changes. 

Business owners should keep records of the information they report to FinCEN and check back frequently that all the information is still current.

Step-by-Step Guide to Completing BOIR

Follow these steps to successfully complete and submit your company’s Beneficial Ownership Information Report to FinCEN:

Step 1: Know Your Reporting Deadline

A good first step in your BOIR journey is to know your company’s reporting deadline. Check the company formation date and find out exactly when you need to submit your report by.

Step 2: Identify All Beneficial Owners

Look over your company’s ownership structure. List anyone who owns 25% or more of the company. You will need to look into all the forms of ownership to get the full picture of your company’s beneficial owners. This includes any agreements that could potentially give someone ownership or control in the future, like options or warrants.

Also take a look at your company’s organizational chart. List any senior officers, executives, and anyone else involved in making important decisions for the company. If your company is a corporation, include all of the directors

Step 3: Identify Company Applicants 

New companies formed on or after January 1st, 2024 need to report their two company applicants. If you paid an incorporation service to form your company, contact them and find out who filed your company’s formation documents with the state. You will need to report their information as the second company applicant. 

Also identify the person who ordered your company to be formed, if it was not yourself. 

Step 4: Collect Information 

For every individual in your report, gather their full name, date of birth, residential address, a photo of their ID document, and the unique identifying number from the document.

For the reporting company, gather the full entity name, jurisdiction of formation, principal address in the U.S. and the company’s federal tax ID number. 

Step 5: File the BOI Report

Now that you’ve identified beneficial owners and collected their information, you can move forward with completing the BOI Report. You can use FinCEN’s E-Filing system, or you can use a BOIR filing service like CTAboi.com to complete the report and submit it directly to FinCEN.

Step 6: Check for Accuracy and File Corrections

Your company’s BOI Report needs to be complete and totally accurate to be compliant with FinCEN’s rules. Double check that all of the information included in your BOI Report is accurate and was inputted correctly. You will need to correct any mistakes or typos within 30 days by filing a corrected report with FinCEN.

Step 7: Keep Track of Changes 

Complying with the CTA doesn’t end after you submit your company’s Initial BOI Report. Beneficial Ownership Information Reporting is an ongoing commitment. You need to update your company’s BOI Report any time the information in a previous report changes. 

Why Did My BOI Report Get Rejected?

FinCEN may reject your BOI Report if there is some kind of error or mistake. FinCEN’s E-Filing system does not tell you what needs to be corrected. It only notifies you that the report has been rejected. However, there are some things that you should try before re-submitting the report. 

Here’s what should do if your BOI Report submission gets rejected by FinCEN:

Select the Right Report Type

FinCEN’s E-Filing system will ask you to choose whether you are submitting an Initial, Updated or Corrected BOI Report before you start. FinCEN may reject your report if you select “Initial BOI Report” when your company has already submitted one. 

FinCEN does not provide a way for you to check whether your company has submitted a BOI Report previously. You may want to ask around your company to see if anyone has already submitted the Initial BOI Report. 

Input All Required Information

FinCEN may reject your submission if you leave one of the required fields blank. Check to make sure that you input all of the required information in the report. 

Confirm Addresses Are Correct

FinCEN may reject your report due to a street address being formatted incorrectly. FinCEN’s E-Filing system does not provide an address verification feature, so be sure to input street addresses properly. 

Check For Errors

The reporting form on FinCEN’s E-Filing system does not allow certain characters or punctuation. Double check all of the information for any errors or misspellings before submitting your report. 

Retake ID Images

Take new pictures of each ID document provided by your beneficial owners. ID images need to be clear and need to show all of the information included on the document. 

Who Collects Beneficial Ownership Information Reports?

The U.S. Financial Crimes Enforcement Network (FinCEN) is in charge of collecting beneficial ownership information. FinCEN is part of the U.S. Department of Treasury. The agency works with banks and financial institutions to investigate potential financial crimes. 

The Corporate Transparency Act (CTA) tasks FinCEN with enforcing the BOI Reporting requirements for business entities and storing their reports in a secure government database.