Beneficial Ownership Information: A Guide to Compliance in 2025

The Corporate Transparency Act (CTA) marks a turning point for business accountability in the U.S., bringing new Beneficial Ownership Information (BOI) reporting requirements that aim to boost transparency and fight financial crimes. This groundbreaking legislation demands that businesses disclose critical details about their ownership structures, with significant implications for business owners and stakeholders.

Why BOI Reporting Matters

BOI reporting serves as a powerful tool to:

• Combat money laundering
• Prevent tax evasion
• Identify potential financial crimes
• Enhance national security

Starting January 1, 2024, many U.S. businesses must report detailed information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). Non-compliance carries serious consequences, including:

• Civil penalties of up to $500 per day
• Criminal fines of up to $10,000
• Imprisonment for up to two years

Key Components of BOI Compliance in 2025

This guide breaks down the essential components of BOI compliance for 2025, including:

• Key provisions of the Corporate Transparency Act
• Specific reporting obligations
• Available exemptions
• Practical compliance strategies

Understanding these requirements is vital for business owners, legal professionals, and corporate stakeholders to maintain compliance and avoid costly penalties.

What Is Beneficial Ownership Information?

Beneficial ownership refers to individuals who exercise substantial control over a company or own at least 25% of its ownership interests. Understanding BOI is essential to identifying decision-makers and preventing illicit financial activities.

Who Qualifies as a Beneficial Owner?

A beneficial owner is someone who:

• Holds senior officer positions
• Has authority over important business decisions
• Possesses voting rights or voting power
• Owns 25% or more of the company
• Is a foreign national meeting these criteria

Required Reporting Entities

The following entities are required to report BOI:

• Domestic corporations and Limited Liability Companies (LLCs)
• Foreign companies registered to do business in the U.S.
• Business trusts and Limited partnerships

The Financial Crimes Enforcement Network (FinCEN) serves as the primary regulatory body overseeing BOI compliance. FinCEN maintains a secure database where companies submit their beneficial ownership information and ensures this sensitive data remains protected while accessible to authorized agencies for law enforcement purposes.

Key Provisions of the Corporate Transparency Act

The Corporate Transparency Act (CTA) is critical to the U.S. government’s efforts to stop financial crimes like money laundering and tax fraud. It was passed in 2021 as part of a larger defense bill and aims to stop the creation of fake companies used for illegal activities.

Key Reporting Requirements Under the CTA:

The CTA requires reporting on the following information:

1. Company Information

• Legal entity name and any trade names
• Principal place of business
• State or jurisdiction of formation
• Taxpayer Identification Number (TIN)

2. Beneficial Owner Details

• Full legal name
• Date of birth
• Current residential address
• Unique identifying number from a government-issued ID
• Image of the identification document

Filing Deadlines:

• New entities must file within 30 days of formation
• Changes to beneficial ownership information require updates within 30 days

The CTA requires strict confidentiality measures to protect sensitive data. FinCEN keeps this information in a secure database that only authorized government agencies and financial institutions with customer consent can access.

These rules establish a consistent framework for corporate transparency, making it more difficult for criminals to misuse U.S. business entities for illegal activities.

Exemptions from Beneficial Ownership Information Reporting Requirements Under the CTA

Not all entities are required to comply with BOI reporting. The Corporate Transparency Act provides specific exemptions for 23 types of entities from Beneficial Ownership Information reporting requirements. The entities exempted from reporting include:

• Securities reporting issuers
• Governmental authorities
• Banks
• Credit unions
• Depository institution holding companies
• Money services businesses
• Brokers or dealers in securities
• Securities exchange or clearing agencies
• Other Exchange Act registered entities
• Investment companies or investment advisers
• Venture capital fund advisers
• Insurance companies
• State-licensed insurance producers
• Commodity Exchange Act registered entities
• Accounting firms
• Public utilities
• Financial market utilities
• Pooled investment vehicles
• Tax-exempt entities
• Entity assisting a tax-exempt entities
• Large operating companies
• Subsidiaries of certain exempt entities
• Inactive entities

The exemption status requires proper documentation to support the qualifying criteria. Entities must maintain records demonstrating their eligibility for exemption and notify FinCEN of any changes that might affect their exempt status.

Who Can Access Beneficial Ownership Reporting Information?

The Corporate Transparency Act established strict protocols for accessing Beneficial Ownership Information (BOI) data. Access to this sensitive information was limited to specific authorized entities, including:

• Federal Law Enforcement Agencies: such as the FBI, Department of Homeland Security, and members of the Intelligence Community.
• State and Local Law Enforcement: Access granted through court authorization with specific case-related justification.
• Financial Institutions: Access permitted for Customer Due Diligence requirements with written consent needed from reporting companies.

FinCEN has implemented robust security measures to protect BOI data. Reporting companies maintained the right to access and correct their own BOI submissions through FinCEN’s secure filing system, ensuring data accuracy while maintaining confidentiality standards.

What are the Penalties for Non-Compliance With Beneficial Ownership Information Reporting Requirements?

Non-compliance with BOI reporting can result in severe penalties, ranging from daily fines of up to $500 to criminal charges that may lead to fines up to $10,000 and imprisonment:

• Civil Penalties: Violations can result in fines up to $500 per day while the violation continues
• Criminal Penalties: Violations may lead to:
  • Fines up to $10,000
  • Imprisonment for up to 2 years
  • Both monetary penalties and imprisonment

Business owners may also face personal liability for non-compliance, even if violations occur through negligence rather than intent. The CTA grants FinCEN authority to pursue enforcement actions against:

• Company officers
• Directors
• Controlling beneficial owners
• Individuals responsible for filing BOI reports

These penalties apply to both initial filing requirements and ongoing obligations to update beneficial ownership information when changes occur.

Best Practices for Ensuring Compliance with Beneficial Ownership Information Requirements

Businesses that want to maintain accurate BOI records and meet regulatory requirements must implement robust compliance strategies. Here are some best practices for effective BOI compliance:

Documentation and Record Management

• Create a system for storing ownership documentation
• Maintain digital copies of identification documents for all beneficial owners
• Establish clear protocols for updating ownership records
• Set up automated reminders for annual reviews

Internal Controls

• Designate a compliance officer responsible for BOI reporting
• Develop written procedures for collecting and verifying ownership information
• Implement a system for tracking ownership changes
• Create an audit trail of all BOI-related activities

Regular Updates and Monitoring

• Schedule quarterly reviews of beneficial ownership structure
• Document all ownership transfers and structural changes
• Keep detailed minutes of meetings discussing ownership changes
• Verify information accuracy before submitting reports to FinCEN

Staff Training

• Train relevant personnel on BOI reporting requirements
• Provide updates on regulatory changes
• Document all training sessions and attendance
• Conduct periodic assessments of staff knowledge

Contact Saltiel Law Group for Expert Assistance with Your Beneficial Ownership Information Compliance Needs

Navigating BOI reporting requirements can be complex, but with Saltiel Law Group’s expert guidance, you can confidently meet your compliance obligations and protect your business from penalties. 

Our Miami-based legal team offers:

• Personalized guidance tailored to your business structure
• Expert interpretation of BOI reporting requirements
• Assistance with compliance documentation
• Strategic advice for maintaining accurate records

Ready to ensure your business meets all BOI compliance requirements? Contact Saltiel Law Group today to schedule a consultation. Our dedicated attorneys will help protect your business interests.

To learn more about BOI reporting, continue reading the FAQs below.

Beneficial Ownership Information FAQs

• What is Beneficial Ownership Information (BOI), and why is it important?

Beneficial Ownership Information (BOI) refers to the details that identify the owners of a company. It is significant in promoting corporate transparency and combating illicit financial activities. Understanding and complying with BOI reporting requirements under the Corporate Transparency Act (CTA) is crucial for businesses in the U.S. to avoid penalties and legal repercussions.

• Who qualifies as a beneficial owner?

A beneficial owner is an individual who directly or indirectly exercises substantial control over a reporting company or owns a significant percentage of its equity interests. Different scenarios and thresholds apply to determine ownership control, which can include individuals holding voting rights or having significant influence over business decisions.

• What are the key provisions of the Corporate Transparency Act (CTA)?

The Corporate Transparency Act (CTA) aims to combat illicit financial activities by enhancing transparency measures. Key provisions related to BOI reporting include initial reporting obligations, information disclosure requirements, and specific guidelines on what constitutes beneficial ownership information that must be reported.

• Are there any exemptions from BOI reporting requirements under the CTA?

Yes, certain entities are exempt from BOI reporting obligations under the CTA. This may include large operating companies, regulated financial institutions, and inactive entities. Understanding these exemptions is essential for businesses to determine their compliance responsibilities.

• What are the potential penalties for non-compliance with BOI reporting requirements?

Businesses that fail to comply with the CTA’s BOI reporting obligations may face significant penalties, including fines and legal repercussions. Non-adherence can lead to serious consequences that impact a company’s operations and reputation.

• What best practices should businesses follow to ensure compliance with BOI requirements?

To maintain compliance with Beneficial Ownership Information requirements, businesses should adopt practical strategies such as keeping accurate records of their beneficial ownership structure, conducting regular updates when there are changes in ownership or company structure, and ensuring timely filing of required reports.