Tips From The Staff/Board

New Beneficial Ownership Information (BOI) Reporting: A Simple Overview for Small Business Owners

If you’ve never heard of the new federal Beneficial Ownership Information (BOI) reporting, you’re not alone. An estimated 32 million small businesses will need to report before January 1, 2025! 

This is currently an evolving situation!

Information is still being released as the U.S. courts continue to evaluate this new requirement. We are closely monitoring the news and will continue to keep you updated as new guidance and recommendations become available.

We’ve summarized the most current need-to-know information to make it as easy as possible for you. For more in-depth info, please see the official Compliance Guide


Choose from two submission options: Online or PDF
Step-by-step instructions with screenshots for Online Form
Step-by-step instructions for using the PDF Form

Should I file now? At this time, FinCEN is accepting Beneficial Ownership Information (BOI) reports from small businesses. For businesses with simple structures, this may be an easy report to complete. However, businesses with more complex ownership and management structures may want to continue to watch as the situation evolves before the January 1, 2025 deadline.

What is BOI and what’s the purpose?

BOI stands for Beneficial Ownership Information. A “beneficial owner” is defined as a person who exercises significant control over a business. This includes the actual shareholders/owners, directors or members of the board, and C-Suite level executives.

So where did this come from? In 2020, Congress passed the Anti-Money Laundering Act, establishing the Corporate Transparency Act (CTA), and requiring the US Treasury Department’s Financial Crimes Enforcement Network “FinCEN” to implement new reporting measures for small businesses. The CTA and BOI are intended to combat money laundering, tax and PPP (Paycheck Protection Program) fraud, and other illegal activities.

In essence, FinCEN aims to increase transparency of business ownership and expose shell companies engaged in financial fraud.

Who needs to report?

Most small corporations and LLCs with: 

  • • 20 or less US-based employees 
  • • Less than $5 million annual gross receipts from sales in the US 

Who is exempt?

  1. Sole proprietors
  2. Large businesses defined by meeting all criteria below: 
    • • More than 20 US-based employees 
    • • $5 million+ gross receipts annually from sales within the US 
  3. Certain types of businesses in banking, investments, securities, insurance, accounting firms, public utilities. See page 11 of the guide. 

When do I need to report?

  • Deadline for currently operating small businesses: January 1, 2025 
  • • Businesses launched in 2024 must file within 90 days of their incorporation date. 
  • • Businesses launched in 2025 or later must file within 30 days of their incorporation date. 

So what info do I need to submit?

  1. Your company info: 
    • • Full legal business name 
    • • DBA (if you have another official name you are “doing business as”) 
    • • US headquarters address 
    • • IRS TIN and/or EIN
    • • State of incorporation
  1. Information on your owners/directors: 
    • • Their full legal name 
    • • Birthdate 
    • • Current residential address
    • • Passport, driver’s license or similar gov’t photo ID

Who counts as a beneficial owner or director?

  1. Any owner(s) holding at least 25%: 
    • • Depending on your company structure, this could be anyone who holds 25% or more of voting rights, equity, stock, capital interest, or similar, including investors. 
    • • Ownership held in a trust must report the trustee(s), beneficiaries, and grantor(s). 

AND 

  1. Any individual who exercises significant authority or control over the business, whether or not they hold any ownership percentage
    • • C-suite officers- President, CEO, COO, CFO, Controller, General Counsel, etc. 
    • • If you have a Board, all members and/or directors, even if they are not actively employed in daily operations 
    • • Any senior manager who exercises important decision making surrounding the company’s finances, strategic direction, staff organization, entry into major contracts, or similar. (it’s a VERY broad definition). 

How often do I have to do this?

There’s no annual renewal, rather, if ANYTHING changes, an updated report must be submitted within 30 days. This includes any ownership percentage changes, new DBAs, and/or change of key personnel.

Remembering to submit these updates regularly can be a big burden on small business owners. We recommend grouping this checkpoint into another regularly scheduled activity, such as preparing quarterly reports.

What if I don’t do it?

Penalties can include civil fines up to $10,000 and a criminal sentence up to 2 years in prison. 

Does the March 1, 2024 ruling change anything?

Not really, but we’re continuing to watch. This first lawsuit was brought by the National Small Business Association (NSBA) on behalf of it’s 60,000 members. The March 1st US District Court ruling creates a temporary exception, but only if you are a NSBA member in good standing as of March 1st, 2024. The law is still in effect for an estimated 32 million small businesses.

More resources:

More detailed FAQs: https://www.fincen.gov/boi-faqs.

New BOI Requirements Will Affect Most U.S. Businesses. Are You Ready? (CLA article)
5 Fast Facts on Beneficial Ownership Information Reporting (CLA article) 
The Corporate Transparency Act: American Bar Association

This article was last updated on 3/6/2024. The summary above represents the most recent information made publicly available, and should not be construed as legal advice.