Beneficial Ownership Information Reports

Under the Corporate Transparency Act (CTA), most small businesses must file Beneficial Ownership Information (BOI) reports with the Financial Crimes Enforcement Network (FinCEN). Beneficial Owners are individuals who either own 25% or more of the company or exercise substantial control over its operations.

Companies that were established or registered before January 1, 2024 must file their initial BOI reports by January 1, 2025. (Reporting companies created or registered to do business in the United States on or after January 1, 2024 and before January 1, 2025, must file initial BOI reports within 90 days after receiving actual or public notice that creation or registration is effective).

Exempt Entities

Large operating companies, which are companies that employ 21 or more full-time employees AND have over $5M in annual sales as listed on their tax return (must meet both requirements), are exempt from the BOI reporting requirements. Inactive and public companies are also exempt. The following online tool can be used to identify if your company qualifies for exemption:

BOI Reporting Quiz

For businesses who do not qualify for exemption, failure to file BOI reports under the CTA can result in significant legal consequences and substantial fines. Fines can reach $10,000, and individuals responsible for non-compliance within a company can face possible criminal charges and jail time.

How To File

The good news is that filing BOI reports is relatively simple and painless. In addition to company information, such as name and address, reporting companies will generally need to provide the following information for each beneficial owner:

• name;
• date of birth;
• address; and
• the identifying number and issuer from either a non-expired U.S. driver’s license, a non-expired U.S. passport, or a non-expired identification document issued by a State (including a U.S. territory or possession), local government, or Indian tribe. If none of those documents exist, a non-expired foreign passport can be used. An image of the document must also be submitted.

BOI reports can be filed on the FinCEN website:

BOI E-Filing System

As always, please reach out to us at [email protected] or 858-565-2700 with any questions you might have regarding this matter.