Businesses in the U.S. have undergone major changes in how ownership information is reported. Over time, the rules, deadlines, and approach for compliance regarding Beneficial Ownership Information (BOI) have evolved, particularly in 2024 and 2025.
As all of these measures involve who must file, who is exempt, or when they must file, it is important to understand the existing rules. The filing rules now depend largely on whether the companies are foreign or U.S.-based and also on whether they qualify for an exemption.
This guide breaks everything down clearly. You’ll learn what a beneficial ownership filing is, who must file today, who is exempt, what information is required, deadlines, penalties, and how to avoid common BOI scams.
What is Beneficial Ownership Filing?
Beneficial ownership filing is a mandatory federal report that shows who really owns or controls a company. It is required under a U.S. law called the Corporate Transparency Act (CTA).
Under this law, certain companies must file a Beneficial Ownership Information (BOI) report to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).
The purpose of this filing is simple. It helps prevent criminals from hiding behind anonymous companies and supports U.S. national security by increasing transparency around company ownership and control.
Why Do Companies Have to File Beneficial Ownership Information (BOI)?
Most companies in the U.S. operate legitimate business purposes. But some criminals use companies with hidden or unclear ownership to carry out illegal activities. These activities include:
Money laundering
Tax evasion
Drug trafficking
Fraud
Terrorist financing
Other financial crimes
This kind of illegal activity harms the economy and puts honest businesses at a disadvantage.
In an attempt to mitigate this issue, the Corporate Transparency Act (CTA) was passed by Congress on January 1, 2021. This legislation took effect on January 1, 2024. Under the legislation, some foreign companies registered to do business in the U.S. must report their beneficial ownership information (BOI) to FinCEN.
Collecting BOI helps protect national security. It also makes it difficult for criminals and other bad actors to hide behind anonymous companies and avoid the law.
Read the relevant article: Why Ownership Filings Matter for Risk Review
Who Must File a BOI Report?
The BOI filing requirement applies only to certain foreign companies as of March 26, 2025.
A company must file a BOI report only if it meets all of the following conditions:
It is formed under the laws of a foreign country
It is registered to do business in the United States by filing with a state or tribal authority
It does not qualify for an exemption under the Corporate Transparency Act
Which Companies Are Exempt from BOI Filing?
According to FinCEN’s interim final rule published on March 26, 2025, companies created in the United States do not need to file BOI reports. These were earlier known as domestic reporting companies and include corporations, LLCs, and similar entities formed under state or tribal law.
U.S. persons are also exempt, meaning individuals in the U.S. are not required to report beneficial ownership information.
The Corporate Transparency Act lists several entities that are exempt from BOI filing. Common exemptions include:
Large operating companies
Tax-exempt entity
Governmental authority
Inactive entity
Public utility
Insurance company
Regulated financial entities, such as banks, credit unions, brokers, or dealers.
You'll find a list of the 23 exemptions on FinCEN’s official FAQ page.
What Information Must be Provided?
For a beneficial ownership filing, FinCEN asks for two categories of information: Beneficial owner information and Company information.
For each beneficial owner, the BOI filing includes:
Full legal name
Date of birth
Current address
A unique ID number (non-expired U.S. passport or driver’s license)
Company details include:
Legal company name
Current business address
If a company is required to report company applicants (the individuals who file the document that creates or registers the company), the same basic identification details are collected for those individuals.
Who is a Beneficial Owner?
A beneficial owner is someone who ultimately owns or exercises substantial control over a business, even if that person’s name is not on the company's official paperwork.
Under U.S. rules, a person is a beneficial owner if they meet at least one of these conditions.
Ownership: They own 25% or more of the company, directly or indirectly.
Substantial Control: They have significant influence over important company decisions.
Substantial control may include:
Senior officers, such as a CEO or CFO
A person who has the authority to appoint or remove executives or directors
Anyone who directs major business or financial decisions
A person does not need to own shares to be considered a beneficial owner if they exercise substantial control.
When to File a BOI Report?
For companies that are required to file:
Companies registered before March 26, 2025: Companies registered before March 26, 2025 to do business in U.S., must file their first BOI reports by April 25, 2025.
Companies registered on or after March 26, 2025: Companies registered on or after March 26, 2025 to do business in U.S., must submit their initial BOI reports within 30 calendar days after getting the notice that registration is effective.
How and Where to File a BOI Report?
All BOI reports must be filed electronically through the official FinCEN BOI E-Filing System. There is no government filing fee. FinCEN does not charge to submit a BOI report.
To file BOI reports, companies must enter basic company details, beneficial owner information, and identification documents such as a valid passport or driver’s license. This can be completed directly using FinCEN’s online form or by uploading a completed PDF through the same system.
Consequences of Not Filing or Misfiling a BOI Report
In a February 27, 2025 press release, FinCEN announced a pause on fines, penalties, or enforcement actions for missed BOI filing or update deadlines under the current rules. FinCEN also stated that it planned to issue an interim final rule by March 21, 2025, and may release additional guidance before setting new enforcement dates.
Shortly after, the U.S. Treasury confirmed on March 2, 2025 that no BOI fines and penalties will be enforced against U.S. citizens or U.S. domestic reporting companies or their beneficial owners. Treasury also explained that the upcoming BOI rules are expected to apply mainly to foreign companies operating in the United States.
However, this relief does not apply to foreign reporting companies. Foreign companies registered in the U.S. must still comply with BOI rules under the updated framework and may still face penalties for willful violations.
For intentional failures, false filings, or failure to correct information, penalties may include:
Civil fines adjusted for inflation (currently up to $591 per day)
Criminal penalties, such as fines of up to $10,000 or imprisonment for up to two years.
BOI Filing Scams and How to Avoid Them
BOI filing scams often target business owners by creating false urgency or asking for payments that are not required.
Common BOI filing scams include:
Emails or letters asking for a fee to file a BOI report
Messages claiming to come from FinCEN or a “government records” office
Threats of immediate fines or legal action
Links or QR codes leading to non-government websites
To avoid this:
Only file through FinCEN's official website, which ends in ‘.gov’
Remember that BOI filing with FinCEN is free
Ignore unsolicited payment requests or forms with unfamiliar names
Do not share sensitive business or personal information unless you are on FinCEN’s official portal
Bottom Line
To conclude, beneficial ownership filing is about transparency and preventing the misuse of companies. While most U.S. companies and individuals are now exempt, some foreign companies still need to file. Because BOI rules can change, it’s important to follow FinCEN updates and file correctly when required.
If you work with ownership records, compliance checks, or company filings, Global Filings can help simplify the process. Its AI-powered Corporate Filings make it easier to review key details without digging through long documents. You can start a free trial to see how it supports faster and more accurate BOI and corporate reviews.
Frequently Asked Questions
Is Beneficial Ownership Filing mandatory?
Yes. Beneficial ownership filing is mandatory because it helps stop the misuse of companies for illegal activities like money laundering, fraud, and tax evasion, etc and authorities can see who really controls companies. Requiring ownership transparency protects the financial system and creates a fairer business environment for legitimate companies.
Do I need to file a BOI report every year?
No. BOI filing is not an annual requirement. A company only files once initially and then files again only if information changes or needs to be corrected.
Is Beneficial Ownership Filing public?
No. Beneficial ownership filing is not publicly accessible. It is stored securely and can only be accessed by approved government agencies and institutions for legitimate use.
Is BOI filing a tax return?
No. BOI filing is not a tax return and has nothing to do with paying taxes. It is a separate transparency report and is not filed with the IRS.
Who is not a beneficial owner?
A person who holds ownership on behalf of someone else is usually not considered a beneficial owner. This includes individuals such as trustees, nominees, executors of a will, or agents who hold shares or ownership interests for the benefit of another person and do not personally control or profit from the business.
What is the difference between a beneficial owner and a company applicant?
A beneficial owner is a person who has at least 25% of the ownership in a company or substantial control of such a company. On the other hand, a company applicant is a person who files or directs the filing to create or register the company.
How do I avoid BOI filing scams?
To avoid BOI filing scams, only file through FinCEN’s official ‘.gov’ website. FinCEN does not charge any filing fees. Ignore emails or letters asking for payment, urgent action, or directing you to non-government websites.
