📑Table of Contents:
We want to inform you of a significant development that could impact your compliance obligations. On March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule that changes who must file Beneficial Ownership Information (BOI) reports. So here’s a little bit about the BOI reporting requirements revised.
Under this new rule, entities formed within the United States are now exempt from BOI reporting requirements. This marks a major shift in policy and removes a layer of regulatory compliance for U.S.-based businesses that would have otherwise been required to submit detailed ownership information to FinCEN.
However, it’s important to note that this exemption does not apply to foreign entities. Companies formed outside the U.S. but registered to do business domestically are still required to submit BOI reports. The deadlines for these filings are as follows:
- Foreign entities registered before March 21, 2025, must file their BOI reports by April 20, 2025 (within 30 calendar days of the rule’s effective date).
- Foreign entities registering on or after March 21, 2025, must file within 30 calendar days of their official registration date.
This update simplifies reporting obligations for domestic companies but keeps the bar in place for foreign entities. If you fall into the latter category, staying on top of your timeline is essential to avoid penalties.
For full details and the official announcement, refer to FinCEN’s release here:
👉 FinCEN News Release – March 21, 2025
We’ll continue to monitor developments and share relevant updates as they become available. In the meantime, we recommend reviewing your entity’s status and confirming whether these changes affect your compliance responsibilities.
What is BOI Reporting?
BOI reporting refers to the process of submitting Beneficial Ownership Information to the Financial Crimes Enforcement Network (FinCEN) as required under the Corporate Transparency Act (CTA). This reporting mandates certain entities to disclose information about the individuals who ultimately own or control them—known as beneficial owners.
Definition: Beneficial Ownership Information Reporting
Beneficial Ownership Information reporting involves providing detailed personal information about individuals who:
- Directly or indirectly own 25% or more of a company, or
- Exercise substantial control over the company (such as senior officers or decision-makers).
The report includes details like:
- Full legal name
- Date of birth
- Residential address
- A unique identifying number from an acceptable identification document (e.g., passport or driver’s license)
Who is Required to Report?
BOI reporting primarily applies to domestic and foreign entities operating in the United States, including:
- Corporations
- Limited Liability Companies (LLCs)
- Other entities created by filing with a Secretary of State or similar office
Exemptions:
There are 23 categories of exemptions, including:
- Large operating companies (with over 20 full-time employees and $ 5 M+ in revenue)
- Certain regulated entities (e.g., banks, insurance companies)
- Nonprofits
Purpose of BOI Reporting
The goal of BOI reporting is to improve corporate transparency and curb illicit activities. Specifically, it helps:
- Combat money laundering and terrorist financing
- Prevent tax evasion, fraud, and corruption
- Support law enforcement and regulatory agencies in tracking illicit financial flows
- Comply with international standards on beneficial ownership transparency
Overview of the Previous Requirements
The original BOI reporting rules, introduced under the Corporate Transparency Act (CTA) and enforced by FinCEN, aimed to increase transparency in business ownership and prevent the misuse of shell companies for illicit purposes. These rules applied to most small and medium-sized entities formed or registered in the United States.
Under the initial framework, all “reporting companies” — including domestic corporations, LLCs, and similar entities — were required to submit a Beneficial Ownership Information (BOI) report unless they qualified for an exemption. The report had to include:
- Full legal name of each beneficial owner
- Date of birth
- Current residential or business address
- A unique ID number and image from a passport, driver’s license, or other approved document
Entities created before January 1, 2024, were given until January 1, 2025, to file their first report. Entities formed on or after January 1, 2024, were originally required to file within 30 days of formation or registration.
Failure to comply with these requirements could result in civil or criminal penalties, including fines of up to $500 per day for ongoing violations.
Key Changes in the Revised BOI Reporting Requirements:
Extended Deadlines for Filing
One of the most significant updates is the extension of filing deadlines. Entities formed or registered on or after January 1, 2024, now have 90 days (previously 30 days) to file their initial BOI report. This gives new businesses more time to gather the necessary information and fulfill their reporting obligations.
Clarification on Exempt Entities
The revised rules offer more precise criteria for determining exempt entities. For instance, large operating companies must meet three conditions:
- More than 20 full-time U.S. employees
- A physical office in the U.S.
- Over $5 million in gross receipts or sales as reported on the previous year’s federal tax return.
Clarifications were also made for subsidiaries of exempt entities and for certain inactive companies.
Changes in the Definition of Beneficial Ownership
While the basic definition remains the same (owning 25% or more, or having substantial control), the revisions provide better explanations of what qualifies as “substantial control.” This includes specific roles such as senior officers, individuals with authority over important decisions, and those who have substantial influence over the company’s operations.
Updated Forms and Filing Portals
FinCEN has improved the BOI e-filing system with a more user-friendly interface and clearer instructions. The updated forms are more intuitive and include optional fields to simplify future updates or amendments.
New Penalties or Compliance Mechanisms
The updated rules reinforce penalties for non-compliance. Willful failure to report or update information can now result in civil fines of up to $500 per day, with a maximum fine of $10,000, and possible criminal penalties. The revisions also offer clearer guidelines for amending reports when there are changes in beneficial ownership or company details.
Filing Process and Timeline
Step-by-Step Filing Process under the New Revisions:
- Determine Entity Status
Confirm whether your company qualifies as a “reporting company” under the CTA or is exempt. - Identify Beneficial Owners
Gather information on individuals who own 25% or more of the business or have substantial control over the business. - Collect Required Information
For each beneficial owner and company applicant (if applicable), you’ll need:- Full legal name
- Date of birth
- Current residential or business address
- Passport or driver’s license number and image of the document
- Register on FinCEN’s BOI E-Filing System
Go to the official FinCEN portal: https://boiefiling.fincen.gov
Create an account and complete the form using the prompts provided. - Submit the BOI Report
Review your information carefully before submitting. You’ll receive confirmation once the filing is complete. - Amend When Necessary
If there are any changes to beneficial ownership or personal information, you must file an updated report within 30 days of the change.
Revised Filing Deadlines:
- Entities created before January 1, 2024:
Must file by January 1, 2025. - Entities formed on or after January 1, 2024:
Must file within 90 calendar days of creation or registration. - Entities formed after January 1, 2025:
Will have 30 calendar days to file.
Tips for Compliance
- Start Early
Don’t wait until the deadline. Begin gathering documents and verifying ownership structures as soon as possible. - Consult Legal or Compliance Experts
A legal professional or CPA can help interpret ownership and control thresholds, especially for complex structures. - Maintain Accurate Records
Keep copies of all submitted reports, supporting documentation, and any correspondence with FinCEN. - Create an Internal Review System
Establish a procedure for regularly reviewing and updating beneficial ownership records, especially during major business changes (ownership transfers, officer changes, etc.). - Use Technology for Assistance
Consider third-party software or compliance tools such as:- EntityKeeper
- FileForms
- LegalZoom’s BOI Reporting Tools
These platforms can help streamline the process and ensure timely submissions.
Frequently Asked Questions (FAQs)
Q: What if I’ve already filed under the old rules?
A: If you submitted your BOI report before the revisions took effect and your information remains accurate, no additional filing is required. However, if there have been changes, you must file an updated report within 30 days.
Q: Does my company qualify for an exemption?
A: There are 23 exemptions listed under the CTA, including large operating companies, banks, and nonprofits. If your company meets the criteria (e.g., 20+ U.S.-based employees and $5M+ revenue), you may not be required to report.
Q: What happens if I miss the deadline?
A: Missing the BOI filing deadline can result in civil penalties up to $500 per day, and in cases of willful noncompliance, criminal penalties including fines and imprisonment. It’s important to act promptly and seek help if needed.
Q: Can I amend my report later?
A: Yes. If your company undergoes a change in ownership or control, or if there’s an error in the report, you must amend it within 30 days of the change.
Q: Is the BOI report public?
A: No. The information submitted is not publicly accessible. It’s stored securely by FinCEN and only available to authorized government agencies under strict conditions.
