What Is a BOI Report? Understanding Beneficial Ownership Information Reporting

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”—non-U.S. citizens who own at least 25% of the company or exercise substantial control over 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 requires foreign businesses 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 Corporate Transparency Act (CTA), the beneficial ownership report is required for foreign reporting companies. A foreign reporting company is a foreign business that has registered with a U.S. state or Native American tribe.

A domestic reporting company may file voluntarily and is not required by law to file. This may be a business entity such as an LLC, corporation, or S corporation created in a U.S. state.

Sole proprietorships and general partnerships aren’t reporting companies and don’t have to file a BOI Report. 

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 non-U.S. citizens 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.

If you file, 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