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In post 2.2.3 (step 9), we explained that Beneficial Ownership Information (BOI) refers to identifying information about the individuals who directly or indirectly own or control a company. The U.S. government collects this information to make it easier to identify crimes such as money laundering through shell companies. In this post we’ll cover why BOI exists, highlight some key information, and outline the steps needed to file BOI.
Why Is Providing Beneficial Ownership Information (BOI) Needed?
In 2021, the US Congress enacted the bipartisan Corporate Transparency Act to prevent fraud and money laundering; companies in the United States must report information about their owners to the Financial Crimes Enforcement Network (FinCEN), part of the U.S. Department of the Treasury.
Beneficial ownership identifies the person(s) who own a legal entity. For short-term rentals, this means disclosing who directly or indirectly can influence company decisions and benefits from the company's operations. Filing beneficial ownership information helps to ensure ownership transparency and demonstrates legitimacy and trust with regulatory bodies.
Who Needs to Report BOI?
According to the FinCEN website, your company may need to report information about its beneficial owners if it is:
a corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
a foreign company and was registered to do business in any U.S. state or Indian tribe by such a filing
Basically if you filed a document with a secretary of state you likely have to provide BOI, there are 23 types of entities that are exempt - see the checklist here (Small Entity Compliance Guide)
Source: FinCEN government site
Other Important BOI Information
Initial Submission: BOI information must be submitted within 30 calendar days after receiving notice of business creation (i.e., you receive your Articles of Organization (post 2.2.5))
Information Updates: BOI submission is not an annual requirement so any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 days
Fees: It is free to submit your BOI to FinCEN
Repercussions: Failing to file BOI, falsifying BOI, or failing to update BOI can result in legal penalties, including fines, criminal penalties, and restrictions on business operations. It may also lead to issues with banks and financial institutions due to non-compliance with anti-money laundering regulations.
5 Steps to Submit BOI Information
Luckily, filing is easy, free, and not an annual requirement, below are the steps to submit your information:
Step 1: Gather Necessary Information
Owner details (e.g., names, addresses, contact details, and Social Security numbers)
Ownership percentages and any changes in ownership
Step 2: Go to FinCEN website
Click “File Your Report Now”
Click “Get Started”
Step 3: Select Filing Method
Step 4: Complete BOI Form
Filing Information (i.e., initial report, correct/update prior report)
Reporting Company (i.e., company name, company address)
Company Applicants (i.e., legal names, address, identification information)
Beneficial Owners (i.e., legal names, address, identification information)
Step 5: Submit & Upload
It’ll ask for an email address and name
Store your confirmation & receipts and records to your Google Drive (or location where you store business documents) - see post 2.1 for recommended folder structure
Download Our Project Plan Tool
In our next post (post 2.2.10), we’ll cover the last step of transferring your property into an LLC. Don’t forget to subscribe to get access to our project plan tool for free:
The project plan will help you stay organized and on track - the file contains detailed steps with duration estimates, resource links, and contextual information in a single location.
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