What Small Businesses Need to Know About Mandatory Beneficial Ownership Information (BOI) Reporting

Beginning January 1, 2025, many U.S. businesses will be required to submit Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN) under the Corporate Transparency Act (CTA). This new federal requirement is designed to increase transparency and help prevent financial crimes such as money laundering, fraud, and tax evasion.

What Is BOI Reporting?

BOI reporting requires certain companies to disclose information about the individuals who ultimately own or control the business. These individuals are referred to as “beneficial owners.” The report is filed directly with FinCEN and is not a public record, but it is mandatory for qualifying entities.

Who May Need to File?

Your company may be required to file a BOI report if any of the following apply:

• Your business is a corporation.
• Your business is a limited liability company (LLC).
• Your company has 20 full-time equivalent employees or fewer.
• Your company was created by filing formation documents with a secretary of state (or similar office) under state or Tribal law.
• Your company is registered to do business in a U.S. state or Tribal jurisdiction by filing with a secretary of state or similar office.

While there are exemptions, many small and mid-sized businesses will fall under the reporting requirement.

Important Deadlines

Most impacted businesses must submit their initial BOI report by January 1, 2025. Additionally, if there are any changes to the information previously reported—such as a change in ownership or control—an updated BOI report must be filed within 30 calendar days of the change.

Next Steps for Business Owners

If you believe your company may be subject to BOI reporting, it’s important to review the requirements carefully and prepare in advance of the deadline. Because compliance obligations vary based on your company’s structure and circumstances, you should consult with your legal counsel and/or accountant to determine whether your business must file and to ensure accurate reporting.

Staying informed now can help your business avoid penalties and remain compliant as these new federal requirements take effect.