With the implementation of the Corporate Transparency Act (CTA) on January 1, 2024, understanding BOI filing requirements has become a critical responsibility for LLC owners across the United States. The CTA mandates that most domestic and foreign LLCs file a Beneficial Ownership Information (BOI) report with FinCEN (Financial Crimes Enforcement Network). This report aims to increase corporate transparency by identifying individuals who own or control companies, helping prevent money laundering and other illicit activities. Whether you’re a small business owner or managing a larger entity, knowing how to navigate BOI reporting, complete the BOI registration form, and determine if your LLC qualifies for an exemption is essential for compliance.
In this guide, we’ll cover:
- What BOI filing is and why it’s required
- Step-by-step instructions for BOI reporting
- Details about the BOI registration form
- Whether all LLCs need to file a BOI report
What Are BOI Filing Requirements?
The Corporate Transparency Act requires most U.S.-registered entities, including LLCs, corporations, and certain partnerships, to file a BOI report with FinCEN. The purpose of this filing is to disclose beneficial ownership information—details about individuals who directly or indirectly own or control at least 25% of a company or exercise significant control over it.
Key Information Required in a BOI Report:
- Company Details:
- Legal name of the company
- Any trade names or DBAs (Doing Business As)
- Principal business address
- State or tribal jurisdiction of formation or registration
- Taxpayer Identification Number (TIN)
- Beneficial Owner Details:
- Full legal name
- Date of birth
- Residential address (or business address for certain applicants)
- Identification number from an acceptable document (e.g., passport or driver’s license), along with an image of the document
BOI Reporting: Who Needs to File?
Reporting Companies:
Most domestic and foreign LLCs are classified as “reporting companies” under the CTA and must file a BOI report unless they qualify for one of the 23 exemptions listed by FinCEN. These exemptions primarily apply to entities already subject to extensive government oversight, such as publicly traded companies, banks, credit unions, and tax-exempt organizations.
Exemptions Include:
- Entities with more than 20 full-time employees in the U.S., operating at a physical office in the country, and earning over $5 million in gross receipts annually.
- Sole proprietorships and general partnerships that are not registered legal entities do not need to file.
BOI Registration Form: How to Complete It?
The BOI registration form is filed electronically through FinCEN’s online portal. Here’s how you can complete it step-by-step:
- Gather Required Information: Collect details about your company and its beneficial owners as outlined above. Ensure all identification documents are valid and unexpired.
- Access FinCEN’s Portal: Visit FinCEN’s website and select the “BOI E-Filing” option. You can choose between completing the form online or downloading a PDF version to submit later.
- Submit Your Report: Fill out all required fields accurately and upload any necessary documents. Note that online submissions must be completed in one sitting as FinCEN’s system does not save progress.
Deadlines:
- Existing entities formed before January 1, 2024, must file their initial report by January 1, 2025.
- New entities formed after January 1, 2024, have 90 days from their formation date to submit their first report.
Do All LLCs Need to File BOI?
Not all LLCs are required to file a BOI report—exemptions exist under specific circumstances as mentioned earlier. However, most small businesses operating as LLCs will need to comply with this requirement unless they meet exemption criteria based on size, structure, or regulatory oversight.
For example:
- Single-member LLCs are generally required to file unless exempted by other factors like employee count or revenue thresholds.
- Passive investment entities such as those holding real estate titles may also be required unless exempt.
Consequences of Non-Compliance
Failing to comply with BOI filing requirements can result in severe penalties:
- Fines up to $500 per day for late filings or inaccurate reports
- Criminal penalties including imprisonment for willful violations
To avoid these consequences, ensure timely submission of accurate information through FinCEN’s portal.