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Finance Forward Blog

New Beneficial Ownership Interest (BOI) Reporting Requirements for Businesses

Beneficial ownership interest (BOI) requirements


As of January 1, 2024, there is a new federal reporting requirement that businesses need to be aware of called Beneficial Ownership Interest (BOI). This regulation mandates that private companies disclose details about their beneficial owners. This new reporting requirement aims to increase transparency and prevent financial crimes. Even if your business has been operating for years, you now need to comply with these new rules. In this blog post, we'll break down what you need to know about BOI reporting requirements.

Who Qualifies as a Beneficial Owner?

The regulations require identifying and reporting individuals who ultimately own or control the company. This includes:

  • Owners of 25% or more of the business, even if their stake is indirect or divided across multiple entities.

  • Those who make major corporate decisions or govern operations without actually owning equity. For example, individuals who can approve budgets, appoint executives, make large expenditures, etc.

  • Top executives like CEO, CFO, COO, president, treasurer, and board chairperson. Their management role automatically qualifies them as beneficial owners.

You'll need to gather information on each of these people and report it to the government under the new rules.

Which Businesses Must Comply?

Most privately held companies like LLCs, partnerships and corporations have to comply, including both new and existing entities. Exempt organizations include banks, publicly traded companies, non-profits, and some other specialized businesses.

What Information Must Be Reported?

For each beneficial owner, companies must report their full legal name, birthdate, current address, and an identification number such as a Social Security or passport number. Data will be kept secure in a private Financial Crimes Enforcement Network (FinCEN) database.

When Do I Need to Report?

Entities formed between 1/1/2024 and 1/1/2025 have a 90-day window to submit their BOI reports. Preexisting entities have until January 1, 2025 to submit initial reports. All entities formed after 1/1/2025 will have a 30-day window to submit their BOI reports.

How Do I Submit the Information?

Filing is done electronically through FinCEN's online portal. Users need to create an account, enter data on beneficial owners, and update them annually. Paper forms will be allowed temporarily but electronic filing will eventually become mandatory.

What Are the Penalties for Non-Compliance?

There are major civil and criminal penalties for failure to comply, such as fines up to $500 daily. Providing false information also brings steep fines and potential criminal charges. Given the serious penalties, compliance is critically important.

Need Help Complying with the New Rules?

While we cannot provide legal advice or file the Beneficial Ownership Information (BOI) report on your behalf, we strongly urge you to take immediate action to ensure compliance. If you are seeking assistance with completing the report, we are recommending that you use TRUSS BOI eFile to make this an easy and quick process. All you have to do is complete their short questionnaire gathering the required information on your business and owners. They are charging $224 per filing and will hold your hand through the filing process.

The key takeaway is that beneficial owner reporting is now required for most private U.S. companies. Let us know if you have any other questions!