What Is a BOI Report? Understanding Beneficial Ownership Information Reporting

Corporate transparency and reporting

The Corporate Transparency Act (CTA) is the result of a bipartisan effort to crack down on financial crimes by business owners who form anonymous American shell companies and use them to disguise their identities as they engage in illicit activities like money laundering, drug trafficking, and human trafficking. According to the federal Financial Crimes Enforcement Network (FinCEN), these illegal enterprises pose threats to legitimate businesses, the U.S. economy, and national security.

The beneficial ownership information reporting rule requires foreign reporting companies operating in the U.S. to file a report providing information about the people who own and control the company. These reports introduce a new level of transparency that should make it harder for bad actors to hide behind American business structures.

Who is considered a 'reporting company' under the CTA?

Under the CTA, the beneficial ownership report is required for foreign reporting companies. A foreign reporting company is a business formed outside of the US that has registered to do business in a U.S. state or through a tribal government.

U.S.-formed businesses, including LLCs and corporations, are no longer considered “reporting companies” and have no BOI filing obligation. Sole proprietorships and general partnerships were never “reporting companies” under the CTA and don’t have to file a BOI Report.

How to file a BOI for an LLC

To prepare a BOI report, start by identifying the “beneficial owners” of your company. A beneficial owner is any individual who:

• Own at least 25 percent of the business.
• Exercises “substantial control” over the business. Examples include a senior officer of the company, anyone with authority to appoint and remove senior officers or members of the governing board, an important decision maker, or someone who exercises substantial control in some other way.

Under the current rule, a foreign reporting company only needs to report information for beneficial owners who are not U.S. persons (U.S. citizens, lawful permanent residents, and domestic entities are excluded from reporting, even if they meet the ownership or substantial control test above).

For each beneficial owner you must report, your BOI should include:

• Full legal name
• Current street address
• A copy of a foreign passport or other foreign government-issued ID

You'll provide information about your company in your BOI report:

• Its legal name and any DBAs
• The address of its principal place of business or primary U.S. location
• The foreign jurisdiction where the business was created
• The business’ tax ID number

Once you’ve gathered your beneficial ownership information, you can complete your free BOIR filing on the FinCEN website, either by filling out the form directly on the website or by completing a PDF form offline and then uploading it. You’ll receive an email confirmation when your BOI for an LLC has been accepted.