The FinCEN BOI Report is a requirement under the Corporate Transparency Act (CTA) that mandates certain businesses, including small businesses, to disclose information about their beneficial owners and company applicants. A beneficial owner is typically someone who has significant ownership (25% or more) or control (directly or indirectly) over the company. The report helps the Financial Crimes Enforcement Network (FinCEN) and other authorities track who is behind companies to prevent illicit financial activities.

Generally, domestic and foreign corporations, limited liability companies (LLCs), and similar entities must file the BOI report unless they qualify for an exemption. Small businesses that fall under these categories must file the report if they are not exempt. Exemptions exist for larger companies that meet certain thresholds (e.g., businesses with more than 20 employees, over $5 million in gross receipts, or significant operational presence) and certain regulated entities like banks and investment companies. Small businesses that do not meet these criteria will be required to submit the BOI report to ensure compliance.

A beneficial owner is defined as an individual who:

• Owns 25% or more of the company’s voting shares or ownership interests, or

• Has substantial control over the company (e.g., through decisions about key management or business decisions).

For small businesses, this often includes the company founders, major investors, or anyone with significant influence over the business. The company applicant refers to the person who files the formation documents for the company and is also required to be reported.