What Is a BOI Report? Understanding Beneficial Ownership Information Reporting

On Dec. 3, 2024, a federal district court in Texas suspended the enforcement of the Corporate Transparency Act (CTA) and its beneficial ownership information (BOI) reporting requirements. However, the federal government appealed this ruling.

While businesses are not currently required to file BOI reports, they may consider preparing their ownership information should the requirements be reinstated. The outcomes of this ruling affect most businesses in the U.S., so it’s crucial to stay informed of any changes.

The Beneficial Ownership Information Report (BOIR, also known as BOI Report) provides details about the people who own and control businesses that operate in the U.S. It’s part of a broader effort to combat money laundering and other criminal activity that threaten fair business practices.

Business entities such as LLCs and corporations file BOI Reports. Here’s what you need to know.

What is a BOI Report? Understanding beneficial ownership information reporting

The Beneficial Ownership Information (BOI) Report falls under the federal Corporate Transparency Act (CTA). A BOI Report lists a company’s “beneficial owners”—the individuals who actually own or control the business. 

The beneficial ownership report may be filed online with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Beneficial owner information is stored in a secure database, where it may be used by law enforcement officials, certain government agencies, and financial institutions subject to due diligence requirements. The information will not be available to the general public.

Exploring BOI reporting

The Corporate Transparency Act is the result of a bipartisan effort to crack down on criminals 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. These illegal enterprises pose threats to legitimate businesses, the U.S. economy, and national security.

The beneficial ownership information reporting rule requests that non-exempt businesses—including legitimate small businesses—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 Corporate Transparency Act (CTA), the beneficial ownership report is only submitted by “reporting companies,” which include:

• A domestic reporting company is a business entity such as an LLC, corporation, or S corporation created in a U.S. state.
• A foreign reporting company is a foreign business that has registered with a U.S. state or Native American tribe.
• Sole proprietorships and general partnerships aren’t reporting companies and don’t have to file a BOI Report.

The CTA has a long list of business types that are exempt from the definition of a “reporting company.”  A U.S. business may qualify for an exemption for large operating companies if it has more than 20 U.S. employees and more than $5 million in U.S. gross receipts or sales, as reported on the previous year's tax return. 

The remainder of the reporting company exemptions apply to nonprofits, publicly traded companies, companies registered under the Commodities Exchange Act, and companies that operate in specific regulated industries such as banking, insurance, and public utilities. A complete list is available on the FinCEN website. 

How to file a BOI for an LLC

To prepare an LLC BOI Report, start by identifying the “beneficial owners” of your company. These are individuals who:

• Own at least 25 percent of the limited liability company.
• Exercise “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.

 Your LLC BOI should include the following information for each beneficial owner:

• Full legal name
• Current street address
• A copy of a government-issued ID document such as a driver’s license, U.S. passport, or other ID document issued by a U.S. state or Native American tribe, with the driver’s license number or other identifying number clearly visible. Beneficial owners who don’t have any of these documents can submit a foreign passport.

 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 state or foreign jurisdiction where the LLC was created
• For foreign LLCs, the state or tribal jurisdiction where the LLC first registered to do business
• The LLC’s 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.

You can also have an outside company, such as LegalZoom, assist you with filing accurately. When you use LegalZoom to submit your BOI Report, you can:

• Enjoy peace of mind
• File with confidence

Understanding BOI

Although a Beneficial Ownership Information Report doesn’t expire, it may be updated if any of the information in it changes. LegalZoom can help you with ongoing BOI report update filings. 

Where can I find the BOI reporting forms and instructions?

The BOI form, along with detailed instructions, is available on the FinCEN website. LegalZoom can help your business file the report.