What is the BOI Report? Get all the details

The BOI Report (Beneficial Ownership Information), sometimes referred to as BOI reporting, is a regulatory requirement implemented by the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury. Effective as of January 1, 2024, its primary purpose is to promote transparency in business ownership structures and prevent illicit activities such as money laundering, tax evasion, and terrorist financing.

Transparency in business operations is a fundamental pillar in the fight against criminal networks. Therefore, the BOI Report requires companies to collect and submit key information about the individuals who directly or indirectly own or control a company. This level of detail helps strengthen trust in financial systems and ensures that corporate structures are not used to conceal illegal activities.

The BOI Report also reinforces international commitments to transparency and regulatory compliance, aligning with global standards promoted by organizations such as the Financial Action Task Force (FATF).

Who must file the BOI Report?

The BOI Report is mandatory for companies considered “reporting companies.” These fall into two main categories:

Domestic reporting companies:

They include:

• Corporations
• Limited Liability Companies (LLCs)
• Other entities formed by filing organizational documents with a Secretary of State or a similar office within the United States.

Foreign reporting companies:

These are entities formed under the laws of a foreign country that have been registered to do business in the United States by filing the equivalent documents.

Any company that meets the criteria of these categories must file the BOI Report within the established deadlines.

Who is exempt from filing the BOI Report?

Although the BOI Report has broad applicability, not all companies are required to comply. There are 23 categories of entities that are exempt from this requirement.

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BOI Report filing deadlines

Filing deadlines vary depending on the company’s formation date:

• Companies formed before January 1, 2024:
  These entities must file the BOI Report between January 1, 2024, and January 1, 2025.
• Companies formed on or after January 1, 2024:
  They have 90 days from the date the company receives its certificate of formation (or equivalent) to file the BOI Report.

Meeting these deadlines is essential to avoid penalties.

What information does the BOI Report include?

The BOI Report requires the collection of specific data about reporting companies and their beneficial owners.

Information about the reporting company:

• Full legal name
• Trade names (DBA), if applicable
• Principal place of business in the United States
• Jurisdiction of formation or registration
• Tax Identification Number (EIN or equivalent)

Information about the beneficial owners:

• Full name
• Date of birth
• Current residential address
• A valid government-issued identification document (driver’s license, passport, etc.) and a scanned copy of this document

This information must be accurate and kept up to date. If significant changes occur in the ownership structure or the owners’ details, the company must file an updated report within 30 days.

Consequences of non-compliance with the BOI Report

Failure to comply with BOI reporting requirements can have serious consequences. FinCEN may penalize non-compliance with filing deadlines or the willful submission of false information through:

• Civil penalties: $500 per day of violation.
• Criminal penalties: Up to 2 years of imprisonment or fines up to $10,000.

Additionally, any errors in the reported information must be corrected within 30 days of discovery to avoid further legal repercussions. Complying with this requirement not only prevents penalties but also protects the company’s reputation, demonstrating a commitment to transparency and regulatory compliance.

Make your compliance process easier

Complying with the BOI Report requirement is a critical step in ensuring transparency and regulatory compliance for your company. While it may seem like a complex process, having OpenBiz’s support ensures a professional, accurate, and error-free filing experience.

With our team, you’ll receive clear guidance at every step, significantly reducing the risk of mistakes that could lead to legal penalties. We ensure that your company meets this mandatory requirement efficiently and without complications.

At OpenBiz, we understand that compliance with regulatory standards should not be an obstacle to your business growth. Contact us today and put your BOI Report in the hands of professionals committed to your success.

Frequently Asked Questions

What if my company has no identifiable beneficial owners?
In cases where there are no clearly identifiable beneficial owners, the company must provide information about individuals with substantial control, such as senior executives or managers responsible for the entity.

Is it necessary to file the BOI Report if my company is inactive?
Yes. Even inactive companies may be required to file the BOI Report if they do not meet a specific exemption. It’s important to verify your company’s legal status before assuming it does not apply.

Must the BOI Report be filed every year?
No, the BOI Report is filed only once unless there are changes in the beneficial owners’ information or the company’s details. In that case, you must submit an update within 30 days.

What is the difference between a beneficial owner and a legal owner?
A beneficial owner is a person who controls or benefits from the company, even if they are not listed as a legal owner. This includes individuals who make strategic decisions or have significant influence over the company’s operations.