If You Own an LLC or Corporation, Have You Filed Your BOIR?

FIle your BOIR report before your deadline. Our trusted partner LegalZoom can help you get compliant and avoid penalties.

What Is the Beneficial Ownership Information Report (BOIR)?

The BOI report is a new rule that requires certain businesses to inform the government about the people who really own and control the company. These people are called “beneficial owners.” A beneficial owner is someone who has a significant amount of control or ownership in the company.

Initially, this requirement applied to domestic and foreign limited liability companies (LLCs) and corporations. Now, it is only required for those companies that are formed in a foreign company and registered to do business in the United States. There is a reporting requirement exemption for domestic reporting companies.

What Do LLCs and Corporations Need to Do?

1. Identify Beneficial Owners: Businesses need to find out who their beneficial owners are. This step means identifying the individuals who have substantial control of a company or has a minimum of 25% of ownership interest in the company. According to FinCEN, “Foreign entities will not be required to report any U.S. persons as beneficial owners, and U.S. persons will not be required to report BOI with respect to any such entity for which they are a beneficial owner.”

2. Complete a BOIR: Once they know who the beneficial owners are, businesses must report detailed information about them. This includes the following information:

• Their full legal name

• Date of birth

• Home address

• A unique identification number (like a passport or driver’s license number)

Company applicants must include the business address and the business entity’s taxpayer identification number, and state of incorporation or formation with the Secretary of State.

How Do I File a BOIR?

1. Go to the Financial Crimes Enforcement Network (FinCen) Website: Any person authorized to act on behalf of the company may file the company’s BOIR. You file a BOIR on FinCEN’s website. To file a BOIR, visit www.fincen.gov/boi and select “File BOIR." Filers can complete the BOIR by downloading a PDF form, filling it out, and submitting it, or by filing online. You can also use reporting companies such as our trusted partner, LegalZoom who will file the BOIR for you.

2. Report on Time: New businesses must provide this information within 30 days of starting. Existing LLCs and corporations have until April 25, 2025 to submit their reports.

3. Update Information: If any information changes, like if a new person becomes a beneficial owner, the business must provide an updated report within 30 days.

4. Keep Records: Business owners must keep records of this information for at least five years after they report or update it.

Why Is the BOIR Important?

Congress enacted the BOIR requirement to make it harder for people to hide illegal activities like money laundering, tax evasion, and terrorism financing. By having this information about who really owns and controls companies, it becomes easier to track and prevent these activities.

Is This Requirement Constitutional?

The BOIR requirement originated from the Corporate Transparency Act (CTA) passed in 2021. Congress created this law to make business ownership more transparent. Recently, a court said that the CTA is unconstitutional, and after much litigation, FinCEN amended the beneficial ownership report to only apply to foreign entities. However, business owners need to stay informed about any changes, but for now, domestic companies are exempt from BOI reporting requirements.

How Does the BOIR Affect Business Owners?

This new rule creates more paperwork. Business owners need to spend time gathering information and completing the report. Businesses can be fined or get into legal trouble if they don’t file a BOIR. Some business owners may not want to share personal information. They should only share this information with authorized entities.

Tips for Completing the BOIR Requirement

Business owners who want to avoid penalties for non-compliance should do the following.

1. Stay up to Date: Business owners should stay informed on the BOIR and CTA to understand what is required.

2. Seek Help: Contact a business lawyer, CPA, or accounting firm for clarification on the rules.

3. Maintain Good Records: Business owners should set up a system to keep updated records of their beneficial ownership information so they have the information when needed.

4. Promptly Report Changes: The good news is that this report only needs to be filed once. However, if there are any changes in company ownership or control, business owners must report these changes quickly to avoid penalties.

While the Beneficial Ownership Information Report (BOIR) aims to make business ownership transparent to prevent illegal activity, it is burdensome for business owners. Avoid penalties by filing your BOIR before the deadline.