The Ultimate Handbook for Understanding the Types of BOI Reports

Starting January 1, 2024, the Corporate Transparency Act (CTA) of 2020 will require all small businesses, LLCs, and corporations to submit a Beneficial Ownership Information (BOI) report to FinCEN. This report must include details about your business, beneficial owners, and company applicants. Transparency in financial and business transactions has become essential.

This article provides an overview of the different types of BOI reports, their significance, and the necessary information to ensure compliance. Whether you're a business owner, tax professional, or simply interested in financial regulations, this guide will help you navigate the complexities of BOI reporting.

Types of BOI Reports

FinCEN categorizes BOI reports into four types based on the specific requirements of the reporting company:

1. Initial Report
2. Updated Report
3. Corrected Report
4. Newly Exempt Entity Report

Let’s dive into each of these reports.

1. Initial Report

The Initial BOI Report is the first report a company submits to FinCEN. It includes essential details such as company information, beneficial owner details, and company applicant information. You'll need to provide the following information:

Information Required for the Initial Report

• Reporting Company Details: Name, address, tax ID number, and jurisdiction of formation or registration.
• Company Applicant Details: Name, date of birth, address, form of identification, issuing jurisdiction, and valid identification documents.
• Beneficial Owner Details: Name, date of birth, residential address, form of identification, issuing jurisdiction, and valid identification documents.

Reporting Deadlines for the Initial Report

• For companies existing before January 1, 2024: You must file your initial BOI report by January 1, 2025.
• For companies created or registered between January 1, 2024, and January 1, 2025: You have 90 calendar days to file your initial BOI report after receiving actual notice that your registration is effective or after public notice from a secretary of state (or similar office), whichever comes first.
• For companies created or registered on or after January 1, 2025: You must file your initial BOI report within 30 calendar days of receiving actual or public notice that your creation or registration is effective.

Note: If your company no longer qualifies for exempt status, you must file a BOI report within 30 calendar days of losing the exemption.

2. Updated Report

An Updated Report is required if there are changes to the information about your company or its beneficial owners. You must file this report within 30 days of the change. This deadline also applies if an individual’s information changes and they need to update their FinCEN identifier.

Information That Can Be Updated

• Changes to the Company’s Information: For example, registering a new DBA (Doing Business As).
• Updates to Beneficial Owners: This includes appointing a new CEO, a sale that changes ownership by at least 25%, or the death of a beneficial owner.
• Updates to Personal Information: If a beneficial owner's name, address, or unique identifying number changes, this must be reflected in a BOI report.

Note: When a minor beneficial owner turns 18, an updated BOI report must be filed, listing the individual as the beneficial owner and updating relevant information.

3. Corrected Report

If a reporting company identifies an error in a previously filed BOI report, a Corrected Report must be submitted within 30 days of discovering or reasonably knowing about the mistake. This applies to inaccuracies in the company’s details, beneficial owners, or company applicants. The same 30-day rule applies to correcting errors in a FinCEN identifier application.

There is no penalty for filing an inaccurate report as long as you correct it within 90 days of the original filing.

4. Newly Exempt Entity Report

If a company that has filed a BOI report later becomes exempt, it must submit an Updated Report indicating its exempt status. This updated report will only require the company to identify itself and check a box confirming its newly exempt status.

What’s Next?

Stay tuned for our upcoming blog series, where we’ll explore what defines a reporting company and discuss the exemptions in detail. For a smooth and efficient BOI efiling experience, consider using TaxBandits. Our comprehensive e-filing solutions and expert support make the process easy and stress-free.