File BOI by January 1, 2025
By: Financial Hotline
Fall 2024 (Vol. 42, No. 3)
BOI refers to identifying information about the individuals who directly or indirectly own or control a company. In 2021, Congress passed the Corporate Transparency Act creating a new reporting requirement as part of the U.S. government’s efforts to expose those companies who are dealing in criminal or fraudulent activity.
Q: Do I need to file?
A: Most small entities do need to file. If you created your company in the United States by filing with your Secretary of State or similar office, then you are required to provide the identity of anyone who owns or controls at least 25% of the company or has substantial control over it.
A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial BOI report. A reporting company created or registered in 2024 will have 90 calendar days to file after receiving actual or public notice that its creation or registration is effective. A reporting company created or registered on or after January 1, 2025, will have 30 calendar days to file after receiving actual or public notice that its creation or registration is effective.
You do not need to pay anyone to file your BOI. You can file online for no cost. If you are required to report your company’s beneficial ownership information to FinCEN, you may do so electronically through a secure filing system available via FinCEN’s BOI E-Filing website (https://boiefiling.fincen.gov). Select “File BOIR” and follow steps to complete the requirement.
There are two types of reporting companies:
- Domestic reporting companies such as corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States.
- Foreign reporting companies (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office.
There are 23 types of entities that are exempt from the reporting requirements. These entities include publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies. You can review the qualifying criteria at www.fincin.gov
Q: Are certain corporate entities, such as statutory trusts, business trusts, or foundations, reporting companies?
A: That depends. The key is only if it was created by the filing of a document with a secretary of state or similar office. Likewise, a foreign entity is a reporting company only if it filed a document with a secretary of state or a similar office to register to do business in the United States. This may also vary by State. For example, if a trust is created in a U.S. jurisdiction that requires such filing, then it is a reporting company, unless an exemption applies.
Q: I am a sole proprietor. Do I have to register?
A: No, unless a sole proprietorship was created or registered to do business in the United States by filing a document with a secretary of state or similar office. Filing or registering with a government agency to obtain an IRS employer identification number (EIN), a fictitious business name, or a professional or occupational license does not create a new entity.
My company was created in Puerto Rico. Am I required to file?
A: Yes. This requirement applies to all 50 states and the District of Columbia, as well as companies created or registered to do business by the filing of a document with a U.S. territory’s secretary of state or similar office, and that does not qualify for any exemptions. These territories are the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, American Samoa, Guam, and the U.S. Virgin Islands.
Do the BOI reporting requirements apply to S-Corporations?
A: Yes. A corporation treated as a pass-through entity under Subchapter S of the Internal Revenue Code (an “S Corporation” or “S-Corp”) that qualifies as a reporting company—i.e., that is created or registered to do business by the filing of a document with a secretary of state or similar office, and does not qualify for any of the exemptions to the reporting requirements—must comply with the reporting requirements.