As of January 1, 2024, the Treasury Department's Financial Crimes Enforcement Network (FinCEN) requires certain entities to report their beneficial ownership information which includes the entity’s ownership and control structure. The BOI Report provides information about the individuals who ultimately own or substantially control the business entity. This is important because entities are formed through state governments and information about these entities is not necessarily communicated to the federal government by the state government.

Beneficial ownership refers to the individuals who own or control the entity directly or indirectly, regardless of whether their names appear on official documentation. This includes those individuals who exercise significant control over the company’s operations, decision making and financial matters, even if they don’t have an ownership interest. According to FinCEN, reporting beneficial ownership information is important to promote transparency, prevent financial crimes, and ensure accountability within businesses.

The “Reporting Company” definition generally includes entities that were created by filing organizing documents with a secretary of state or similar office, such as LLCs, corporations, limited partnerships, and foreign entities registered to do business in any U.S. state. Some entities, like heavily regulated financial institutions, tax-exempt organizations, inactive businesses, and others that meet specific operating criteria, are exempt from the BOI Report requirement.

A BOI Report typically requires disclosing the names, addresses, birthdates, and ownership percentages of individuals who directly or indirectly own or control the business. Owners are also required to report an identification number, such as a driver's license or passport number, along with a picture of the document. A social security number cannot be used for a BOI Report.