FinCEN Beneficial Ownership FAQs—Understanding BOI

As of January 1, 2024, all reporting companies are obligated to report beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN). This means you must file a report containing identifying information on everyone who has an ownership interest or substantial control over your company.

BOI reporting is a new and largely unknown concept, which makes it quite daunting—especially due to the penalties you might face if you get it wrong.

To clear the air, we’ve compiled a list of FinCEN beneficial ownership FAQs that help you meet all reporting requirements. You’ll also learn how Harbor Compliance removes all guesswork from BOI reporting to give you peace of mind.

Beneficial Ownership FAQs

Below, you’ll find nine of the most common questions company owners and other decision-makers have regarding BOI reporting.

1. What Is Beneficial Ownership Information (BOI)?

BOI encompasses the identifying information of your company’s beneficial owners. It includes the following:

• Full name
• Date of birth
• Complete current address
• Image, issuing jurisdiction, and unique number of any of the following documents:
• U.S. passport (or a foreign one if the person doesn’t have a domestic passport)
• Driver’s license
• Identification document issued by the local government, state, or tribe

You need to provide the above information on all beneficial owners alongside the following company information:

• Full legal name
• Trade name or Doing Business As (DBA)
• Street address
• Jurisdiction of formation (alongside the jurisdiction of first formation for foreign companies)
• Taxpayer Identification Number (TIN) and Employer Identification Number (EIN)

2. Who Is a Beneficial Owner?

A beneficial owner is an individual who meets either of the following two requirements:

1. Having substantial control over the company, which encompasses:
1. Senior officers
2. Important decision-makers
3. Anyone who can appoint/remove officers
4. Individuals exercising any other form of substantial control
2. Owning at least 25% of the company’s ownership interest (stock, equity, voting rights, convertible instruments, etc.)

Note that there are five exceptions from the beneficial owner definition:

1. Minor children
2. Nominees, intermediaries, custodians, or agents
3. Employees—An individual qualifies for this exemption if all of the following criteria apply:
1. They are subject to the will and control of the employer, and the employer holds the right to discharge them from work
2. Their substantial control over or economic benefits from the company are derived only from their employee status
3. They don’t serve as the company’s senior officer
4. Inheritors
5. Creditors

If an individual who would otherwise be considered a beneficial owner falls under any of the above categories, they don’t need to be included in the BOI report.

3. Which Companies Need To File a BOI Report?

BOI reporting is obligatory for all reporting companies, meaning domestic and foreign companies formed by filing a relevant document with the secretary of state or equivalent regulatory body. This encompasses corporations, LLCs, and most other organizations.

There are 23 specific entity types exempt from filing a BOI report, which you can find in this section of the Small Entity Compliance Guide. If your organization doesn’t fall under any of those categories and qualifies as a reporting company, you must report BOI to FinCEN.

4. Why Do You Need To Report BOI?

BOI reporting is mandatory under the Corporate Transparency Act (CTA). The CTA aims to prevent money laundering and similar illicit activities that can be performed through shell companies or legitimate businesses.

5. When Do You Need To File a BOI Report?

If your organization was formed between January 1, 2024, and January 1, 2025, you must file your initial BOI report within 90 days of receiving a notice that your formation/registration has taken effect. Companies formed after January 1, 2025, have 30 days to file the report. FinCEN differentiates between two types of notices:

1. Actual—Received as direct correspondence from the secretary of state or similar governing body
2. Public—Appears on a public registry created by the secretary of state or another governing body

Jurisdictions take different approaches to notices, so you might receive one or both. In the latter case, the BOI report due date is set according to the earlier notice received.

Companies formed before January 1, 2024, are allowed an extended timeframe, so they have until January 1, 2025, to submit the initial report.

6. What Happens if You Don’t Report BOI?

Failure to report your company’s BOI in the aforementioned timeframe can result in civil or criminal penalties outlined in the following table:

The same penalties apply to any attempted or actual provision of false information.

7. How To File a BOI Report

You must file your report through FinCEN’s secure online filing system, the Beneficial Ownership Secure System (BOSS). If you can’t submit the report through the system, contact FinCEN for instructions. Since the announcement of the BOI Reporting Rule, there’s been a rise in email scams aimed at extracting company information, so beware of any suspicious correspondence and follow FinCEN’s guidelines.

If you want to stay on the safe side, you can take a more secure and hands-off approach with Harbor Compliance. Our BOI Reporting Service ensures accurate and timely filing of up to four initial reports, updates, and corrections per year.

8. What if the BOI Report Contains Inaccuracies?

If you discover any errors in your BOI report, you must correct them within 30 days of noticing them or having a reason to be aware of them. You won’t face any penalties for filing an inaccurate report as long as you correct it within 90 calendar days.

9. What Happens After You File a BOI Report?

After you submit the initial BOI report, you must make sure the information is up to date at all times. If any of it changes, you need to file an updated report no later than 30 days after the change has occurred. This doesn’t only encompass changes to the beneficial ownership but also the specific identifiable information of each beneficial owner.

Harbor Compliance—Automated, Worry-Free BOI Reporting

Running a business is challenging enough without the looming threat of outdated or inaccurate BOI reports. That’s why we’ve launched a comprehensive BOI Reporting Service that takes this task off your shoulders.

When you sign up, we’ll prepare and submit the report on your behalf so that you can focus on core business operations instead of worrying about the complexities of reporting.

The BOI Reporting Service is suitable for various types of reporting companies, most notably:

• Corporations and LLCs
• Small businesses
• Multientity businesses
• Multinational companies
• Nonprofits that aren’t 501(c) exempt

Besides the initial filing, we’ll provide ongoing support to ensure your reports stay accurate and up to date at no additional cost.

Why Engaging With Harbor Compliance Is Superior to Filing the Report Yourself

Due to the aforementioned penalties, BOI reporting shouldn’t be taken lightly. While you can file a report yourself, there are many nuances you might overlook, which FinCEN most likely won’t treat as an honest mistake.

Thanks to our extensive experience navigating regulatory filings, we can confidently take over the entire reporting process. This saves you a considerable amount of time, and it’s also one less thing you need to worry about, knowing that your BOI reporting is managed by a team of experts.

We’ll also send you periodic reminders to check whether some of your BOI requires an update. Timely updates are easily the most challenging part of BOI reporting since FinCEN should be notified of even the slightest changes.

For example, if one of your company’s beneficial owners changes the driver’s license provided as the identification document, you should send an update as soon as possible. There are numerous similar situations you may not deem important, so we’ll help you stay vigilant.

If you opt for the Record Manager add-on, we can track your company’s leadership and ownership details to ensure all relevant information is centralized and accurate.

How To Order Our BOI Reporting Service

The process of signing up for our BOI Reporting Service is quick and easy—all you need to do is complete this wizard. Here’s how:

1. Choose the applicable option:
1. Single business
2. Nonprofit that is not 501(c) exempt
3. Multiple entities
2. Fill out your contact and company information
3. Click Checkout

When you order the service, we’ll gather the relevant information and submit your initial BOI report. You’ll receive proof that the filing has been completed alongside regular notifications and alerts regarding updates and corrections.

Other Ways Harbor Compliance Helps You Meet the Necessary Regulations

BOI reporting is the newest addition to your existing statutory obligations. Whichever state you operate in, you must meet numerous requirements to avoid disruptions to your business. We’re here to support you every step of the way through an array of services, such as:

• Entity lifecycle management—We can help your organization get off the ground by expediting some initial tasks like reserving a name, obtaining an EIN, and filing your initial report. We also provide support with the annual reports filings, DBA management, amendments, or even withdrawals.
• Registered agent—Our Registered Agent Service makes Harbor Compliance your main point of contact with your jurisdiction’s secretary of state or equivalent regulatory body. We accept and forward service of process and other official notices to help you take the necessary action promptly. We can also help you change your existing agent if you want to partner with a reliable provider like Harbor Compliance.
• Business licensing support—We can help you obtain and manage the licenses you need to operate, including general business licenses and industry-specific ones (construction, engineering, etc.).
• Document filing and retrieval—Harbor Compliance expedites important filings through the Drop-Off Filing Service and can obtain crucial documents like your certificate of good standing or authority, certified copies, articles of reinstatement, and more.
• Nonprofit formation—We can complete the nonprofit incorporation or charitable registration process on your behalf and secure your 501(c) tax exemption.

Enjoy Peace of Mind With Harbor Compliance

As a beneficial owner of a company, the last thing you need is another ongoing obligation to think about. Order our BOI Reporting Service, and we’ll take care of all the necessary reports, updates, and corrections with little to no effort needed on your part.

To make sure your company is operating in accordance with all the other regulations, get a free Harbor Compliance Score™. It will help you identify any red flags so that you can resolve them quickly.

For additional support, you can reach out to us and inquire about the additional services you saw here. We’ve also launched a comprehensive software solution that makes it easy to meet your obligations, so schedule a demonstration to see how it works. If you need further guidance with BOI reporting, you can consult FinCEN’s Small Entity Compliance Guide or the FAQ page. Our Information Center also features an extensive library of resources on BOI reporting and beyond, so feel free to explore it.