BOI Reporting Requirements By Business Entity Type

As the deadline approaches for reporting companies to submit their BOI report to FinCEN, many business owners are still questioning if they need to file a report. I field that sort of inquiry a lot when presenting webinars on the topic and the answer is often related to the type of business entity utilized by the business.

If you’re new to the subject of BOI reporting, you can reference one of my earlier articles to come up to seep quickly:

• How the Corporate Transparency Act Affects Your Company
• What Is a BOI Report and Do You Need to File One
• Company Applicant vs. Beneficial Owner
• Do Inactive Business Entities Need to File a BOI Report?
• Consequences of Not Filing a BOI Report

Now that everyone is refreshed on the requirements of BOI reporting, let’s look at how these responsibilities change by some of the most popular types of business entities.

Sole Proprietorship

• A Sole Proprietorship that hasn’t registered with a Secretary of State or similar office is not a reporting company and does not have to submit a BOI report.
• Merely filing for a fictitious name (or DBA), obtaining an EIN, applying for a business license, or registering for payroll taxes does not constitute the creation of an entity. Doing those things does not make a Sole Proprietorship subject to the BOI reporting requirements.

General Partnership

• If a General Partnership was formed by registering with a Secretary of State office (or similar office) it is considered a reporting company and must file a BOI report.
• If a General Partnership was not formed by registering with a Secretary of State office (or similar office), it is not required to file a BOI report.
• A General Partnership is not subject to BOI reporting if it registers for a DBA, requests an EIN, or applies for business or professional licenses or permits. Those types of filings do not form an official business entity.

Limited Liability Company (LLC)

• A Limited Liability Company created or registered to do business with the Secretary of State or similar office must file a BOI report.
• Both Single-Member and Multi-Member LLCs are subject to the BOI reporting requirements.
• If an LLC qualifies for one of the CTA’s 23 exemption categories, it does not have to file a report.
• Any LLC member who directly or indirectly owns or controls 25% or more of the entity’s ownership interests is considered a beneficial owner.
• Any person who exercises substantial control over the LLC (either directly or indirectly) is considered a beneficial owner.
• Depending on their responsibilities and authority level, an LLC’s manager or high-ranking employees might be considered to have substantial control. If so, the LLC must report their information in the BOI report.
• If an LLC has opted to have officers, those individuals might meet the definition of having substantial control. If so, their information must be disclosed in the BOI report.
• In certain situations, a reporting company may report an entity (or entities) rather than individuals as beneficial owners. An example would be when an individual’s ownership is solely through one or more entities that are exempt from BOI reporting requirements.
• If an LLC was created on or after January 1, 2024, it must also report at least one company applicant.

Limited Liability Partnership (LLP)

• If a Limited Liability Partnership was registered with a Secretary of State or similar office, it must file a BOI report.
• Any LLP that meets the qualification requirements for an exemption does not have to file a BOI report.
• Any partner in an LLP who directly or indirectly owns or controls at least 25% of the entity’s ownership interests is considered a beneficial owner.
• Any person (e.g., a top-level manager, depending on their responsibilities and authority level) who exercises substantial control over the LLP is regarded as a beneficial owner.
• Under some circumstances, a reporting company may report an entity as a beneficial owner. For example, when individuals who are beneficial owners solely through entities that are exempt from the BOI reporting requirements, the LLP may report the exempt entity name(s) rather than the individuals’ personal information.
• If an LLP was created on or after January 1, 2024, it must also report at least one company applicant.

Professional Limited Liability Company (PLLC)

• A Professional Limited Liability Company registered with the Secretary of State (or similar office) is subject to the Corporate Transparency Act’s BOI reporting requirements, and therefore, must file a report.
• The only exception is if the PLLC qualifies for one of the 23 exemption categories.
• If a Professional LLC member directly or indirectly owns or controls 25% or more of the entity’s ownership interests, they are considered a beneficial owner and must be entered in the report.
• Any person (such as a PLLC manager, depending on their responsibilities and authority level) who exercises substantial control over the entity is considered a beneficial owner.
• If a Professional LLC has officers, their information must be included in the BOI report if those individuals exercise substantial control.
• Beneficial owners must be individuals under most circumstances. However, in certain scenarios, a reporting company may report an entity instead. An example is if ownership is through any entity (or entities) that qualify for an exemption, the reporting company may report the name of the exempt entity rather than information about an individual who is a beneficial owner.
• If a PLLC was created on or after January 1, 2024, it must also report at least one company applicant.

C Corporation

• A C Corporation is registered as a business by filing a document with a Secretary of State or similar office. This registration automatically makes the C Corporation a reporting company, and it is therefore required to file a BOI report.
• If a C Corporation is owned by a trust, it is still subject to the BOI reporting requirement.
• If a C Corporation qualifies for one of the 23 exemptions, it is not subject to the BOI reporting rule.
• Any shareholder who directly or indirectly owns or controls 25% or more of the C Corporation’s ownership interests is considered a beneficial owner.
• Any individuals with direct or indirect substantial control over the organization are also regarded as beneficial owners.
• Stakeholders, such as executives, officers, board directors, venture capitalists, and individuals who control an intermediary entity that controls the reporting company, must be documented on the BOI report if they have substantial control.
• Generally, beneficial owners must be individuals. However, in certain circumstances, such as when a beneficial owner’s ownership is through an exempt entity (or multiple exempt entities), the reporting company may report the name of the exempt entity in lieu of information about a natural person who is a beneficial owner.
• If a C Corporation was created on or after January 1, 2024, it must also report at least one company applicant.

S Corporation

• An S Corporation is a pass-through structure for tax purposes and this does not affect an entity’s BOI reporting responsibilities.
• A Corporation or LLC that elects to be treated as a pass-through entity under Subchapter S of the Internal Revenue Code is considered a reporting company.
• An S Corporation must file a BOI report unless it qualifies for one of the 23 exemption categories.
• Any S Corporation shareholder who directly or indirectly owns or controls at least 25% of the entity’s ownership interests is considered a beneficial owner.
• Any person with direct or indirect substantial control over the S Corp is considered a beneficial owner.
• Certain executives, officers, board members, or other stakeholders might meet the definition of having substantial control. If so, their beneficial ownership information should be disclosed on the BOI report.
• If an S Corporation was created on or after January 1, 2024, it must also report at least one company applicant.

Professional Corporation

• A Professional Corporation registered with the Secretary of State (or similar office) must file a BOI report unless it qualifies for one of the CTA’s 23 exemptions.
• In its BOI report, the entity must disclose any shareholder who directly or indirectly owns or controls 25% or more of its ownership interests as a beneficial owner.
• Any person who exercises direct or indirect substantial control over the Professional Corporation should also be identified as a beneficial owner.
• Examples of stakeholders who might have substantial control include shareholders, officers, and directors of the entity.
• In some situations, a Professional Corporation may report entities as beneficial owners rather than individuals. For example, if an individual’s ownership is through an exempt entity (or multiple exempt entities), the name of the exempt entity may be disclosed instead of information about the person.
• If a Professional Corporation was created on or after January 1, 2024, it must also report at least one company applicant.

Nonprofit Corporation

• A Nonprofit Corporation registered with a Secretary of State (or similar office) may or may not have to file a beneficial ownership information report.
• Tax-exempt Nonprofit Corporations under section 501(c) of the Internal Revenue Code, political organizations under section 527(e)(1), and trusts described in section 4947(a) are exempt from the BOI reporting requirement.
• Examples of 501(c) exempt nonprofits include organizations created for charitable, educational, scientific, and social welfare causes.
• Other nonprofit organizations must file a BOI report unless they qualify for a different exemption category.
• Unlike a for-profit entity, a Nonprofit Corporation does not have percentage-based ownership interests. So, the substantial control aspect of BOI determines who must be reported.
• Any individual who exercises substantial control over the nonprofit’s activities and operations—such as a senior officer or director or someone with the authority to appoint or remove senior officers—should be identified as a beneficial owner.
• If a Nonprofit Corporation responsible for filing a BOI report was created on or after January 1, 2024, it must also report at least one company applicant.

Keep in mind the deadline for reporting is quickly approaching and we expect to see processing delays the closer we approach this due date. As a reminder, the deadlines for entities considered reporting companies vary.

Here are the BOI due dates you need to be aware of:

• For entities created or registered before January 1, 2024, the BOI report is due by January 1, 2025.
• For a new entity created or registered on or after January 1, 2024, and before January 1, 2025, the BOI report is due within 90 days of the date of formation or registration.
• For a business created or registered on or after January 1, 2025, the BOI report is due within 30 days of the date of formation or registration.

Enlisting the guidance of an attorney or accountant to determine your company’s legal obligations and identify who meets the criteria of “beneficial owners” within your organization can help ensure you file a report if required and disclose all the right individuals.

If you need assistance preparing and submitting your BOI filing, contact the CorpNet team to save time and get peace of mind.

Sources and References:

• Beneficial Ownership Information Frequently Asked Questions. https://www.fincen.gov/boi-faqs. Accessed August 13, 2024.
• Small Entity Compliance Guide – Beneficial Ownership Information Reporting Requirements. https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide.v1.1-FINAL.pdf. Accessed August 13, 2024.