BOI Exemptions: Find Out If You Need To Report

boi exemptions, find out if your entity qualifies before BOI report deadlines
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Your Comprehensive Guide to BOI Exemptions under the Corporate Transparency Act

I’ve taken the time to dive deep into the FinCEN Small Entity Compliance Guide so you don’t have to! As of January 1, 2024, most small U.S. businesses must file Beneficial Ownership Information reports (BOI reports) with the Financial Crimes Enforcement Network (FinCEN). These reports are mandatory for Reporting Companies, defined as entities required to submit BOI reports. However, there are 23 specific BOI exemptions, and it’s crucial to understand if you or your clients qualify before the BOI report deadlines.

boi exemptions, find out if your entity qualifies

What the BOI Exemptions Mean for Your Clients

The Corporate Transparency Act (CTA) exemptions are designed to help businesses like yours by easing some of the reporting burdens. These exemptions acknowledge that not every business poses the same level of risk for money laundering or other illicit activities.

Understanding these exemptions is crucial for determining whether your business needs to file a Beneficial Ownership Information (BOI) report.

So, What are the exemptions to the BOI Reporting requirements? Let’s explore the 23 BOI exemptions outlined in FinCEN’s Small Entity Compliance Guide to see if your business qualifies for some relief.

BOI Exemptions Overview

Here’s a quick look at the 23 specific exemptions:

Exemption CategoryCriteria
1. Large Operating CompaniesOver 20 full-time employees, U.S. office, and >$5M gross receipts
2. Inactive EntitiesExisted before January 1, 2020, inactive, U.S. ownership, limited transactions
3. BanksMeet federal banking definitions
4. Credit UnionsMeet federal credit union criteria
5. Holding CompaniesQualify as a bank or savings and loan holding company
6. Money Transmitter BusinessesRegistered with FinCEN
7. Securities Brokers/DealersRegistered under the Securities Exchange Act
8. Securities Exchanges/Clearing AgenciesRegistered under the Securities Exchange Act
9. Other Registered EntitiesOfficially registered with the SEC
10. Investment Companies/AdvisersDocumented with the SEC
11. Venture Capital Fund AdvisersUnder the Investment Advisers Act of 1940
12. Insurance CompaniesDefined under the Investment Company Act of 1940
13. State-Licensed Insurance ProducersAuthorized insurance producers with a U.S. presence
14. Commodity Exchange Act Registered EntitiesRegistered under the Commodity Exchange Act
15. Public Accounting FirmsRegistered under the Sarbanes-Oxley Act of 2002
16. Public UtilitiesRegulated public utilities offering specific U.S. services
17. Financial Market UtilitiesDesignated by the Financial Stability Oversight Council
18. Pooled Investment VehiclesOperated or advised by specified entities
19. Tax-Exempt EntitiesFit IRS Code sections or are trusts described in specific sections
20. Entities Assisting Tax-Exempt EntitiesProvide financial assistance to tax-exempt entities, U.S. owned and funded
21. Securities Reporting IssuersIssue securities and registered under the Securities Exchange Act
22. Subsidiaries of Certain Exempt EntitiesOwned by specified exempt entities
23. Government Authority ExemptionEstablished under U.S. laws, Indian tribe, State, or agreement between States

Special Reporting Rules

As outlined in the small entity compliance guide, there are special reporting rules as part of the qualifying process:

  • Owned by an Exempt Entity: Report the names of entities that own your business, rather than listing individual owners, if those entities are already exempt from reporting requirements.
  • Minor Child: If a minor child is a beneficial owner of a business, report the required information about the child’s parent or legal guardian instead.
  • Foreign Pooled Investment Vehicle: If categorized as a foreign pooled investment vehicle, follow specific reporting requirements under the Corporate Transparency Act.
  • Company Applicant Reporting for Existing Companies: Companies existing or registered before January 1, 2024, don’t need to report company applicant information.

boi exemptions, find out if your entity qualifies

Penalties for Violating BOI Reporting Requirements

Failure to comply with BOI reporting requirements can lead to severe consequences:

  • Civil Penalties: Up to $500 per day for each violation.
  • Criminal Penalties: Up to two years imprisonment and a fine of up to $10,000.
  • Violations Include: Willful failure to file, filing false information, or failing to correct/update reported information.

(Updated: December 12, 2023)

Beneficial Ownership Reporting Deadlines

Staying on top of your Beneficial Ownership Information (BOI) reporting deadlines is crucial to avoid penalties and ensure compliance with the Corporate Transparency Act. Here’s a quick overview of the key deadlines you need to be aware of:

  • Companies Registered Before January 1, 2024: Deadline – January 1, 2025.
  • Companies Registered Between January 1, 2024, and January 1, 2025: 90 calendar days after notice.
  • Companies Registered After January 1, 2025: 30 calendar days from notice.

(Updated: January 12, 2024)

Losing Your BOI Exemptions Status

If your company previously qualified for an exemption but no longer meets the criteria, you must act quickly. File a Beneficial Ownership Information (BOI) report within 30 days of losing exemption status. This rule emphasizes the need for ongoing checks to ensure your business remains eligible for exemptions under the Corporate Transparency Act. Failing to meet this deadline can result in penalties and legal issues, so staying proactive in compliance is essential.

BOI Exemptions Checking Made Easy With FincenFetch

boi exemptions, find out if your entity qualifies before BOI report deadlines

At FincenFetch, we understand that figuring our the qualifications for BOI exemptions can be a timely process. That’s why our Exemption Checker tool is a top choice for firms assisting clients with Corporate Transparency Act compliance. It simplifies exemption checks for businesses and their advisors, allowing you to quickly determine if you qualify for any of the 23 exemptions.

Our tool is designed to be user-friendly and efficient. In just a few clicks, you can assess many client companies, ensuring they meet compliance rules with ease.

FincenFetch Features

Our BOI filing platform stands out from the rest, offering several unique features that make it the top choice for law and accounting firms:

  • SOC 2 Compliance: We prioritize data security and privacy, ensuring that our platform meets rigorous SOC 2 standards. This compliance demonstrates our commitment to protecting your clients’ sensitive information.
  • Automated Reminders: Never miss BOI report deadlines with our automated reminder system. This feature helps you stay on top of important dates, ensuring timely submissions and compliance.
  • Comprehensive Dashboard: Our intuitive dashboard provides a clear overview of all your clients’ BOIR statuses, upcoming deadlines, and exemptions at a glance.
  • Easy Data Import: Seamlessly import client data into FincenFetch with our user-friendly data import tools, saving you time and reducing manual entry errors.
  • Client Collaboration: Collaborate efficiently with your clients through our secure platform, where you can share documents, track progress, and communicate directly.

About FincenFetch

FincenFetch began developing solutions for the Corporate Transparency Act in mid-2022, anticipating its impact on nearly 40 million U.S. companies. We built tools to handle this large volume well before the regulation launched. Now, nearly two years later, our team is ready to help you meet these compliance requirements.

boi exemptions, find out if your entity qualifies before BOI report deadlines

Our platform, refined through discussions with law and accounting firms, is the most advanced on the market, reducing reporting times from 2.5 hours to just 5 minutes per company.

We leverage advanced automation technologies, enabling efficient management of thousands of BOI reports with features like client reminders and collaborative reporting.

Security is our core value. We adhere to ISO 27001 standards, conduct frequent penetration testing, and enforce strict PII access controls to ensure your data is safe.

Ready To Start Filing BOI Reports?

If you are looking for more detailed information about all 23 CTA exemptions and their eligibility criteria, head to our Exemptions guide. It provides a deeper breakdown of each exemption, helping you make informed compliance decisions.

At FincenFetch, we’re dedicated to helping you navigate your clients BOIR filings with confidence and ease. Try our tools and experience the difference!

Are you ready to see our platform in action? Schedule your demo today!

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Tessa Wismer

Meet Tessa Wismer, an expert in beneficial ownership reporting with a background in business and marketing. She simplifies financial rules and enhances business strategies. Join her on FincenFetch Insights for valuable perspectives, practical tips, and a professional approach to compliance mastery.