Your Comprehensive Guide to BOIR Exemptions under the Corporate Transparency Act
As of January 1, 2024, most small U.S. businesses must file Beneficial Ownership Information reports (BOIR) 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 BOIR exemptions, and it’s crucial to understand if you or your clients qualify. At FincenFetch, we aim to simplify the complex regulations and ensure compliance with ease!
What the BOIR Exemptions Mean for Businesses
The Corporate Transparency Act (CTA) exemptions offer significant relief to certain types of businesses, reducing the burden of reporting requirements. Furthermore, the exemptions provide flexibility and acknowledge that not all entities pose the same risks for money laundering or illicit activities. Therefore, by qualifying for an exemption, you can streamline your compliance efforts and focus on your core operations. Understanding these exemptions is key to determining whether your business is obligated to file.
BOIR Exemptions Overview:
- Large Operating Companies: Employ over 20 full-time workers, maintain an active U.S. office, and exceed $5,000,000 in gross receipts.
- Inactive Entities: Exist before January 1, 2020, not active, U.S. ownership, and limited funds transactions.
- Bank Exemption: Fit federal banking definitions.
- Credit Union Exemption: Meet federal credit union criteria.
- Holding Company Exemption: Qualify as a bank or savings and loan holding company.
- Money Transmitter Business Exemption: Registered with FinCEN as a money transmitter or services business.
- Securities Broker or Dealer Exemption: Registered under Securities Exchange Act.
- Securities Exchange or Clearing Agency Exemption: Registered under Securities Exchange Act.
- Exemption for Other Registered Entities: Officially registered with the SEC.
- Investment Companies or Advisers Exemption: Defined as an “investment company” or “investment adviser” and documented with the SEC.
- Exemption for Venture Capital Fund Advisers: Investment advisers under the Investment Advisers Act of 1940.
- Insurance Companies: Fit the Investment Company Act of 1940 definition.
- State-Licensed Insurance Producers: Authorized insurance producers with a U.S. presence.
- Commodity Exchange Act Registered Entities: Registered entities under the Commodity Exchange Act.
- Public Accounting Firms: Registered under the Sarbanes-Oxley Act of 2002.
- Public Utilities: Regulated public utilities offering specific U.S. services.
- Financial Market Utilities: Designated by the Financial Stability Oversight Council.
- Pooled Investment Vehicles: Operated or advised by specified entities.
- Tax-Exempt Entities: Fit IRS Code sections or are trusts described in specific sections.
- Entities Assisting Tax-Exempt Entities: Provide financial assistance to tax-exempt entities, U.S. owned and funded.
- Securities Reporting Issuer: Issue securities and registered under Securities Exchange Act.
- Subsidiaries of Certain Exempt Entities: Owned by specified exempt entities.
- Government Authority Exemption: Established under U.S. laws, Indian tribe, State, or agreement between States.
BOIR Special Reporting Rules
- Owned by an Exempt Entity: This exemption allows a business to report the names of entities that own it, rather than listing individual owners, if those entities are already exempt from reporting requirements.
- Minor Child: In this context, a minor child refers to an individual under the legal age of adulthood. If a minor child is a beneficial owner of a business, then the business doesn’t need to report their information; instead, they report the required information about the child’s parent or legal guardian.
- Foreign Pooled Investment Vehicle: This term refers to an investment fund that pools together money from multiple investors, and it is organized and operated outside of the United States. If your businesses is categorized as a foreign pooled investment vehicle, then you have specific reporting requirements under the Corporate Transparency Act.
- Company Applicant Reporting for Existing Companies: This exemption applies to companies that existed or were registered before January 1, 2024. Such companies don’t have to report company applicant information as part of their compliance with the Corporate Transparency Act.
Expired BOIR Exemptions
If your company previously qualified for an exemption but no longer meets the criteria, you must act quickly. If you lose your exemption status, file a Beneficial Ownership Information (BOI) report within 30 days. 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 it’s essential to stay proactive in compliance.
BOIR Filing Deadlines
- Existing companies: If you are an existing company, then you must file your initial BOI reports by January 1, 2025.
- New companies: If you are a new company, then you must file within 30 days of creation or registration.
BOIR Exemptions Checking Made Easy With FincenFetch
FincenFetch’s Exemption tool is a top choice for firms helping clients with Corporate Transparency Act compliance, mainly because it simplifies exemption checks for businesses and their advisors. Moreover, our user-friendly features allow you to quickly assess many client companies, ensuring they meet compliance rules with ease. Click the image to the right to take our exemption quiz and find out if you qualify!
FincenFetch Features:
Our BOIR 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 a filing deadline 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.
Transition your clients to FincenFetch for smoother compliance and watch your practice thrive!
Ready To Start Filing Your BOIR?
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 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!
