In an effort to prevent shell companies from committing financial crimes, Congress enacted the Corporate Transparency Act (CTA) on January 1, 2021. The CTA requires small businesses created in the United States before January 1, 2024, to file a Beneficial Ownership Information (BOI) Report to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) before January 1, 2025. Additionally, companies created or registered after January 1, 2024 have 90 days to file their BOI report with FinCEN after receiving notice that their company’s creation or registration is effective. Twenty-three types of entities are exempt from filing a BOI report including certain types of banks, insurance companies and Commodity Exchange Act registered entities. 

LLCs, single-member LLCs, Limited Partnerships, S Corporations and C Corporations are all required to file a BOI report unless otherwise exempt. Although a BOI report is only required to be filed once, after January 1, 2025, any updates or changes to the reporting information from both new and existing companies, must be filed within 30 days with FinCEN. BOI reports must be filed online at the FinCEN BOI E-Filing System Portal before January 1, 2025, for entities created before January 1, 2024. 

Companies required to file a BOI report are generally required to provide information about each beneficial owner of the entity, including names, dates of birth, addresses and state identification numbers. Additionally, each entity is required to submit information about itself, including its legal name and complete address, along with the jurisdiction in which the entity was first formed or registered, and the entity’s taxpayer identification number (TIN). The company's attorney or accountant can assist with filing the BOI reports.

Business owners who formed or registered their entity before January 1, 2024, have until January 1, 2025, to submit their BOI report to FinCEN. After January 1, 2024, new business entities have 90 days to file the report. Companies who fail to file or update their BOI report may be subject to penalties of up to $500 for each day that the violation continues.

For more information on filing requirements or exemptions from filing a BOI report to FinCEN, please visit FinCEN's Small Entity Compliance Guide or Iowa State University’s Center for Agricultural Law and Taxation’s reporting update for more information.