In the wake of the Corporate Transparency Act (CTA), startups in the U.S. face a new reporting requirement: the Beneficial Ownership Information (BOI) Report. This requirement, implemented by the Financial Crimes Enforcement Network (FinCEN), aims to increase transparency, helping prevent financial crimes such as money laundering and fraud. But what exactly is a BOI report, who needs to file it, and what does it involve? Here’s a simplified guide for startup founders to get up to speed.

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What is a BOI Report?

A BOI report provides FinCEN with critical information about individuals who have substantial control or ownership in a company. Startups incorporated in the U.S. are likely required to file this report, barring a few exceptions, and must disclose information about their beneficial owners—those with significant ownership or control.

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Who Needs to File a BOI Report?

Most businesses formed in the U.S., including corporations and LLCs, are required to file. However, certain entities may qualify for an exemption. If your startup:

• Is a large operating company with over 20 U.S.-based employees and more than $5 million in annual sales, or
• Is a regulated financial institution like a bank or investment firm,

you may be exempt from filing. For a comprehensive list, consult FinCEN’s Small Entity Compliance Guide.

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What Information is Needed for BOI Reporting?

Filing a BOI report involves providing specific details about your startup and its beneficial owners, including:

• For the Startup: Legal name, DBA (if any), U.S. address, incorporation state, and EIN.
• For Beneficial Owners and Applicants: Legal name, date of birth, address, and ID (such as a U.S. passport or driver’s license). Founders are typically considered beneficial owners, especially if they own 25% or more of the startup.

If preferred, beneficial owners can apply for a FinCEN identifier (FinCEN ID) to avoid sharing personal details within the company. This ID replaces other identifying information in the BOI report and shifts responsibility to the owner to keep FinCEN updated.

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How to File a BOI Report

There are two main filing methods:

1. PDF Submission: Download the form, complete it offline, and upload it to FinCEN’s portal once done. This method allows you to work at your own pace.
2. Online Portal: Submit your report directly on FinCEN’s portal, which provides automatic validation to reduce errors.

Be sure to keep copies of your report and any related documents for future reference and potential compliance audits.

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When is the BOI Report Due?

Filing deadlines vary based on when your startup was incorporated:

• Before January 1, 2024: The report is due by January 1, 2025.
• Between January 1, 2024, and December 31, 2024: Submit within 90 days after incorporation.
• On or after January 1, 2025: File within 30 days of incorporation.

Staying Updated

Once filed, updates are only required if your startup’s beneficial ownership or other reported information changes, with a 30-day window for reporting these changes. Importantly, the BOI report isn’t an annual requirement; a single filing is generally sufficient unless updates are needed.

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FAQs About BOI Reporting

• Do I need to file this annually? No, the BOI report is typically a one-time filing unless updates are required.
• What if my startup loses its exemption status? If you no longer qualify for an exemption, your startup must file within 30 days.
• What happens if I don’t comply? Non-compliance can lead to penalties, including fines and potential legal consequences.

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Need Help with BOI Reporting?

Navigating BOI reporting requirements can feel daunting, but we’re here to support you. Book a free consultation with us, and let’s ensure your startup remains compliant and focused on growth.

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