FinCEN Beneficial Ownership Information Report

In 2021, Congress enacted the Corporate Transparency Act (CTA) as part of a comprehensive effort to combat financial crimes and enhance national security. This legislation established a beneficial ownership information reporting requirement designed to address problems that have long allowed bad actors to exploit anonymous shell companies and complex ownership structures for illicit purposes. By requiring companies to disclose their true owners to federal authorities, the CTA aims to make it significantly more difficult for criminals to use corporate entities to hide or benefit from proceeds of money laundering, fraud, terrorist financing, tax evasion, and other serious crimes. In September 2022, Financial Crimes Enforcement Network (FinCEN) finalized a rule introducing a reporting obligation for beneficial ownership information (BOI) under the CTA. Briefly, beneficial ownership information consists of identifying details about individuals who have direct or indirect ownership or control over a company.

FinCEN published an interim final rule on March 26, 2025, that revised the definition of  “Reporting Company” in its regulations implementing the CTA to mean only those entities formed under the law of a foreign country that have registered to do business in any U.S. State or tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”). FinCEN also formally exempted entities previously known as “domestic reporting companies” from the CTA’s reporting requirements.

Foreign entities that meet the new definition of a “reporting company” and do not qualify for an exemption from the reporting requirements are required to file with FinCEN under new deadline:

• Reporting companies registered to do business in the United States on or after March 26, 2025, have 30 calendar days to file an initial BOI report after receiving notice that their registration is effective.        

What Is Reporting Company?

According to FinCEN's frequently asked questions guide, there are two types of reporting companies:

• Domestic reporting companies are corporations, limited liability companies, and any other entities created by filing a document with a secretary of state or any similar office in the United States.
• Foreign reporting companies are entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by filing a document with a secretary of state or any similar office.

However, 23 types of entities are exempt from the beneficial ownership information reporting requirements. These entities include publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies. The following table summarizes the 23 exemptions: 

Who is a beneficial owner of a reporting company?

 Beneficial owner is an individual who either directly or indirectly:

(i)             exercises substantial control over the reporting company, or

(ii)           owns or controls at least 25% of the reporting company’s ownership interests.

Only individuals (i.e., natural persons) can qualify as beneficial owners. Therefore, entities such as trusts, corporations, or other legal persons are not considered beneficial owners.

o   What if a corporate entity owns or controls 25% or more of a reporting company? Generally,  such a reporting company reports the individuals who indirectly either;

§  In such cases, the reporting company must identify and report the individuals who indirectly meet the beneficial ownership criteria through that entity.

What is substantial control?[1]

An individual is deemed to exercise substantial control over a reporting company if they meet any of the following criteria:

1. The individual holds a senior officer position, such as President, Chief Executive Officer (CEO), Chief Financial Officer (CFO), General Counsel, Chief Operating Officer (COO), or any other role with a similar level of authority.
2. The individual has the authority to appoint or remove senior officers or a majority of the board of directors (or a comparable governing body).
3. The individual directs, determines, or has substantial influence over important decisions made by the company, including decisions regarding business strategy or significant operations.

·      Important decisions include decisions about a reporting company’s business, finances, and structure. An individual that directs, determines, or has substantial influence over these important decisions exercises substantial control over a reporting company.

4.     The individual exercises substantial control through other means, including innovative or nontraditional forms of influence. For example, flexible corporate structures may result in alternative indicators of control not explicitly covered by the categories listed above.

Will a reporting company need to report any other information in addition to information about its beneficial owners?

Yes, the companies created or registered on or after January 1, 2024, it must report information about itself, its beneficial owners, and its company applicants.

What information will a reporting company have to report about itself?

A reporting company will have to report:

1. Its legal name;
2. Any trade names, “doing business as” (d/b/a), or “trading as” (t/a) names;
3. The current street address of its principal place of business if that address is in the United States (for example, a U.S. reporting company’s headquarters), or, for reporting companies whose principal place of business is outside the United States, the current address from which the company conducts business in the United States (for example, a foreign reporting company’s U.S. headquarters);
4. Its jurisdiction of formation or registration; and
5. Its Taxpayer Identification Number (or, if a foreign reporting company has not been issued a TIN, a tax identification number issued by a foreign jurisdiction and the name of the jurisdiction).

The reporting company will also have to indicate whether it is filing an initial report, or a correction or an update of a prior report.

What information will a reporting company have to report about its beneficial owners?

For each individual who is a beneficial owner, a reporting company will have to provide:

1. The individual’s name;
2. Date of birth;
3. Residential address; and
4. An identifying number from an acceptable identification document such as a passport or U.S. driver’s license, and the name of the issuing state or jurisdiction of identification document.

The reporting company will also have to report an image of the identification document used to obtain the identifying number in item 4.

Who is a company applicant of a reporting company and what information will a reporting company have to report about its company applicants?

Company applicant is the individual who directly filed the creation or first registration document for the reporting company with the secretary of state or similar office.

A company that must report its company applicants will have only up to two individuals who could qualify as company applicants:

1. The individual who directly files the document that creates or registers the company; and
2. If more than one person is involved in the filing, the individual who is primarily responsible for directing or controlling the filing.

For each individual who is a company applicant, a reporting company will have to provide:

1. The individual’s name;
2. Date of birth;
3. Address; and
4. An identifying number from an acceptable identification document such as a passport or U.S. driver’s license, and the name of the issuing state or jurisdiction of identification document (for examples of acceptable identification

The reporting company will also have to report an image of the identification document used to obtain the identifying number in item 4.

If the company applicant works in corporate formation—for example, as an attorney or corporate formation agent—then the reporting company must report the company applicant’s business address. Otherwise, the reporting company must report the company applicant’s residential address.

Is there a requirement to annually report beneficial ownership information?

No. There is no annual reporting requirement. Reporting companies must file an initial BOI report and updated or corrected BOI reports as needed.

Does a reporting company need to file a beneficial ownership information report each time it registers to do business in a different state?

No, if an existing company is merely authorized to do business in another state, no additional BOI report is required in connection with that authorization.

What should a reporting company do if previously reported information changes?

If there is any change to the required information about the reporting company or its beneficial owners, an updated beneficial ownership information report must be filed no later than 30 days after the date the change occurs.

However, reporting companies are not required to file an updated report for changes to previously reported information about company applicants.

What are common events that may require a reporting company to update its beneficial ownership information?

The following are some examples of the changes that would require an updated beneficial ownership information report:

• Any change to the information reported for the reporting company, such as registering a new business name.
• A change in beneficial owners, such as a new CEO, or a sale that changes who meets the ownership interest threshold of 25 percent.
• Any change to a beneficial owner’s name, address, or unique identifying number previously provided to FinCEN. If a beneficial owner obtained a new driver’s license or other identifying document that includes a changed name, address, or identifying number, the reporting company also would have to file an updated beneficial ownership information report with FinCEN, including an image of the new identifying document.

How To Report The Company’s Beneficial Ownership Information?

It can be easily done electronically through a secure filing system available via FinCEN’s BOI E-Filing website.[2] The report form can be found inside the website as “File BOIR”.

Who can file a BOI report on behalf of a reporting company, and what information will be collected on filers?

Anyone a reporting company authorizes to act on its behalf; such as an employee, owner, or third-party service provider, may file a BOI report on the reporting company’s behalf. When submitting the BOI report, individual filers should be prepared to provide basic contact information about themselves, including their name and email address. The person filing the BOI report, including a third-party service provider, must certify on behalf of the reporting company that the information is true, correct, and complete.

What should be done if an inaccuracy is identified in a report?

If an inaccuracy is identified in a beneficial ownership information report, it must be corrected no later than 30 days from the date the company became aware of the inaccuracy or had reason to know of it. This requirement applies to any incorrect information provided regarding the company, its beneficial owners, or its company applicants. The timeline for submitting a corrected report is outlined in the infographic below.

What happens if a reporting company does not report beneficial ownership information to FinCEN or fails to update or correct the information within the required timeframe?

If you correct a mistake or omission within 90 days of the deadline for the original report, you may avoid being penalized. However, you could face civil and criminal penalties if you disregard your beneficial ownership information reporting obligations.

As specified in the Corporate Transparency Act, any individual who willfully violates the BOI reporting requirements by failing to file a report, knowingly submitting false information, or willfully failing to correct or update a previous report may face:

• Civil penalties of up to $591 for each day (adjusted annually for inflation)
• Criminal penalties including up to two years imprisonment and/or a fine of up to $10,000.

What happens if a reporting company does not report beneficial ownership information to FinCEN or fails to update or correct the information within the required timeframe?

If you correct a mistake or omission within 90 days of the deadline for the original report, you may avoid being penalized. However, you could face civil and criminal penalties if you disregard your beneficial ownership information reporting obligations.

As specified in the Corporate Transparency Act, any individual who willfully violates the BOI reporting requirements by failing to file a report, knowingly submitting false information, or willfully failing to correct or update a previous report may face:

• Civil penalties of up to $591 for each day (adjusted annually for inflation)
• Criminal penalties including up to two years imprisonment and/or a fine of up to $10,000.

Who can be held liable for violating BOI reporting requirements?

Both individuals and corporate entities can be held liable for willful violations. This can include not only an individual who actually files (or attempts to file) false information with FinCEN, but also anyone who willfully provides the filer with false information to report. Both individuals and corporate entities may also be liable for willfully failing to report complete or updated beneficial ownership information; in such circumstances, individuals can be held liable if they either cause the failure or are a senior officer at the company at the time of the failure.

In conclusion, the FinCEN Beneficial Ownership Information (BOI) reporting requirement, introduced under the Corporate Transparency Act, represents a significant step toward increasing corporate transparency and combating illicit activities. Except for certain exempt entities, all reporting companies operating in the U.S. must disclose their beneficial owners to FinCEN. Failure to comply may result in serious civil and criminal penalties for both individuals and entities involved.

[1] https://www.fincen.gov/boi/small-entity-compliance-guide

[2] https://boiefiling.fincen.gov/