Everything You Need To Know About Beneficial Ownership Reporting

As of January 1, 2024, the Corporate Transparency Act (CTA) requires all reporting companies to gather and report beneficial ownership information (BOI). Affected companies must submit a BOI report to the Financial Crimes Enforcement Network (FinCEN), or they risk incurring significant penalties.

This guide dives into the key components of beneficial ownership reporting to help you meet all the necessary requirements. You’ll learn what the report should include, where and how to file it, and how Harbor Compliance makes the reporting process effortless.

What Is a Beneficial Ownership Report?

A beneficial ownership information (BOI) report is a document that includes identifying information on a company’s beneficial owners. If your company was registered on or after January 1, 2024, the report must also include information on your company applicants.

The CTA defines a beneficial owner as an individual who either has substantial control over a company or owns at least 25% of its ownership interests. This implies your company might have various beneficial owners, such as:

  • Senior officers
  • Large shareholders
  • Important decision-makers

Company applicants are defined a bit more precisely and split into two types:

  1. An individual who directly filed a document that formed the company
  2. An individual who was responsible for directing and controlling the filing (only applicable if more than one person participated in the company’s registration)

When you identify beneficial owners and company applicants (if they’re required for your company), you need to gather the following information on each individual:

  • Full legal name
  • Date of birth
  • Complete current address
  • Picture, unique number, and issuing jurisdiction of a driver’s license, passport, or another identification document issued by the state, tribe, or local government

List the above details for each necessary individual in your BOI report, and you can submit it to FinCEN.

Beneficial Ownership Information Reporting Requirements

Besides the information you must include in your BOI report, there are several requirements you should familiarize yourself with. The first one outlines the legal entities obligated to file a BOI report since not all organizations are affected by the CTA.

Specifically, you only need to do so if your organization qualifies as a reporting company. This encompasses corporations, LLCs, and other domestic or foreign organizations formed by filing a registration document with the secretary of state or equivalent governing body.

If you are merging or acquiring a company that is up to date with licensing requirements, but your business was not previously licensed in the required jurisdictions, you will want to ensure you either transfer the existing licenses or file for a new license. The process will depend on the state in which your business is located.

According to the CTA, 23 legal entity types are exempt from BOI reporting. The full list of exemptions with qualification criteria is available in FinCEN’s Small Entity Compliance Guide.

Another crucial requirement is the filing timeline. Depending on when your company was formed, one of three possible timeframes will apply to you, as explained in the following table:

Formation Date BOI Reporting Timeframe
Before January 1, 2024 Until January 1, 2025
January 1, 2024–January 1, 2025 Within 90 days of receiving a notice that your company’s registration has taken effect
After January 1, 2025 Within 30 days of receiving a notice that your company’s registration has taken effect

Failing to submit a BOI report within these time windows can result in the violation of the CTA and expose you to civil or criminal penalties, so make sure not to miss your due dates.

How To File a BOI Report

FinCEN offers an online filing system you can use to submit your BOI report. The Beneficial Ownership Secure System (BOSS) was developed to ensure your BOI stays protected and can be updated without complications. If you’re unable to file electronically, you should contact FinCEN for guidance and available alternatives.

Note that filing the initial BOI report is only one part of the reporting process. You must also keep FinCEN updated on all the changes to your beneficial ownership structure or specific information on beneficial owners.

If any of the above changes, you have 30 days to submit an updated report containing all the necessary information. Breaking this deadline can also result in penalties, so you should check for BOI changes regularly.

The problem here is that company owners have far too much on their minds even without having to worry about BOI. Luckily, you can take a more hands-off approach to BOI reporting with Harbor Compliance.

Harbor Compliance—BOI Reporting Made Easy

If you don’t have the bandwidth to deal with the CTA requirements on your own, Harbor Compliance is here to help. Our BOI Reporting Service ensures accurate reports and timely updates with little work on your part, saving you a significant amount of time and energy you can spend on impactful work.

If you engage with us, we’ll gather all the necessary information and submit it to FinCEN on your behalf. We’ll then provide ongoing support to ensure up to four corrections and updates per year are handled swiftly, minimizing your risk of violations and penalties.

All reporting companies can leverage the BOI Reporting Service, regardless of their type and structure. Whether you run a small business, multinational company, or nonprofit that isn’t 501(c) exempt, our team can take BOI reporting off your plate.

Reporting BOI Yourself vs. Partnering With Harbor Compliance

According to FinCEN’s estimates, submitting a BOI report can take up to three hours per entity. It’s a time-consuming task, especially if you run a multi-entity organization. If you outsource reporting to us, you can avoid such waste and have peace of mind knowing that your report is handled by a team of experts.

More importantly, filing the initial report is only the first (and simpler) step of the reporting process. All BOI must be kept current and accurate, so you must continuously be on the lookout for changes in your company’s ownership structure and beneficial owners’ information. Harbor Compliance does the following to make updates effortless:

  1. We send you automated periodic reminders to check if your BOI needs to be updated, so you don’t need to worry about the threat of unreported changes.
  2. When any relevant information is changed, we submit an updated BOI on your behalf, sparing you the hassle of doing so independently.

You can also sign up for the optional Records Manager, which lets you keep track of important data, such as:

  • Corporate records
  • Board meetings and minutes
  • Leadership and ownership information

By centralizing all this information, you’ll avoid complex tracking systems that might lead to crucial data slipping through the cracks.

How To Order Our BOI Reporting Service

You can order our service online by completing a simple wizard. First, choose from the following three options depending on your needs and business structure:

  1. Single business
  2. Nonprofit that is not 501(c) exempt
  3. Multiple entities

You’ll then be taken to a form where you should leave your contact information and company details. Complete the form and check out, and we’ll take it from there.

After gathering the necessary information, we’ll submit your BOI report and keep in touch to ensure you don’t forget to keep it updated.

Explore Our Services Beyond BOI Reporting

Harbor Compliance offers an array of services that help you stay on top of all your regulatory obligations. Whether your organization has only gotten off the ground or been active for years, we can support it throughout its lifecycle by completing the following tasks in your name:

You can also appoint us as your registered agent to let us accept legal and government notices on your behalf, ensuring they don’t go unnoticed. Our Change of Agent Service lets you partner with us even if you already have an agent, as we can complete the change without any effort needed on your part.

If you need a general business license or an industry-specific one (construction, engineering, etc.), we can help you obtain and manage them. We can also obtain various other documents on your behalf, such as:

Besides retrieving your documents, we can submit important filings to the secretary of state or other governing bodies through our Drop-Off Filing Service. We deliver your documents in person, which gives them priority over those sent by mail or online.

Our additional area of expertise is nonprofit formation. We can complete the incorporation or charitable registration process from start to finish and secure your 501(c) tax exemption to help you start raising funds quickly.

BOI Reporting FAQs

Below, you’ll find answers to some of the commonly asked questions about BOI reporting. If you need additional guidance, visit FinCEN’s FAQ page or the Harbor Compliance Information Center.

Beneficial ownership information is the identifying information of a reporting company’s beneficial owners, which includes their name, address, date of birth, and details of their government-issued identification document.

The CTA enforced BOI reporting as a part of their efforts to prevent money laundering and similar illicit activities through shell companies or legitimate businesses.

The CTA came into effect on January 1, 2024, which is when FinCEN started gathering BOI from the affected companies.

You can send a BOI report through FinCEN’s secure filing system. FinCEN recommends contacting them in case you’re unable to file your report electronically.

Enjoy Stress-Free BOI Reporting With Harbor Compliance

Like other regulatory requirements, BOI reporting should be handled by experts. Order our BOI Reporting Service today, and we’ll make sure your report is submitted and updated timely without much action needed on your part.

If you need help staying on top of your other obligations, you can also take the following steps:

You can also schedule a demonstration of our robust compliance platform to discover the many ways it can help you meet your obligations without hassle.