Published May. 30, 2025 02:30AM EDT
Beneficial Ownership Reports—What They Are, Who Must File, and When
In 2024, the U.S. Department of Treasury created a new required disclosure that almost all small- and medium-sized businesses will need to comply. The new regulations came into effect on January 1, 2024, and are implementing the Corporate Transparency Act, which aims to strengthen US money-laundering enforcement through shell companies. The regulations require businesses and certain trusts to submit information on their ownership and management structure to the U.S. Department of Treasury. This information, referred to as Beneficial Ownership Information (BOI), is to be submitted to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) by nearly all companies.
The following provides a high-level overview of the rules and requirements. It is intended only as an introduction to the reporting requirement. Please keep in mind there may be nuances in application to you such that consulting with a business-law attorney is advisable, particularly since this is a new area of corporate law and corporate compliance.
Who Must File
All US and foreign companies doing business in the United States are very likely required to submit BOI documentation. The regulations apply to corporations, limited liability companies, limited liability partnerships, and any other company created by filing paperwork with a state secretary of state (or similar entity). An entity that must report is referred to as a “Reporting Company”. There are twenty-three relatively limited exceptions to the requirement but they are generally very narrow and will not apply to most small- and medium-sized businesses.
When Must BOI Be Filed
There are three different deadlines for submitting BOIs, depending on when the Reporting Company was formed:
- Created Before January 1, 2024: If your Reporting Company was created prior to 2024, it has until December 31, 2024, to submit the necessary paperwork.
- Newly Created Companies in 2024: If you create a Reporting Company this year, between January 1, 2024, and December 31, 2024, it has 90 days to submit the necessary paperwork.
- Newly Created Companies after 2024: If you create a Reporting Company after December 31, 2024, it has 30 days to submit the necessary paperwork.
After the initial submission, there is an ongoing obligation to update the BOI submitted within 30 days of the change.
What Must Be Filed
The specific type of information required varies depending on the structure of the Reporting Company, ownership, and management. Generally speaking, the following is required:
- Reporting Company Information: Legal name, trade names, addresses, jurisdiction of formation, and tax identification numbers;
- Persons Exercising Substantial Control: Legal name, date of birth, residential address, and copy of government-issued identification for persons that exercise decision-making authority for important matters to the company or exercise control over reporting for the Reporting Company, including but not limited to persons acting as CEO, CFO, general counsel, and/or chief operating officer;
- Persons with Reportable Ownership Interest: Legal name, date of birth, residential address, and copy of government-issued identification for persons who own or control at least 25 percent of the ownership interest of the Reporting Company.
In addition to the above, for a Reporting Company created on or after January 1, 2024, FinCEN will require information about the persons that create a new Reporting Company.
Penalties
FinCEN has stated that penalties for the willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.
