By Pam Sosa
Owner, Standard Mortgage Financial Services, Inc.

As part of the Corporate Transparency Act, the rule requiring the filing of a Beneficial Ownership Information Report (“BOI”) became effective January 1, 2024. Under this Act, domestic corporations, Limited Liability Companies (including single member LLCs), limited partnerships, business trusts, and other entities registered with their Secretary of State, under the laws of their state, must report various information about their company, including who the Beneficial Owners are. The agency who receives these reports is the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”).

According to the FinCEN website:

 “The rule will enhance the ability of FinCEN and other agencies to protect U.S. national security and the U.S. financial system from illicit use and provide essential information to national security, intelligence, and law enforcement agencies; state, local, and Tribal officials; and financial institutions to help prevent drug traffickers, fraudsters, corrupt actors such as oligarchs, and proliferators from laundering or hiding money and other assets in the United States.”   

While this may sound like it’s all-inclusive there are 23 types of exempt entities which are listed in the Small Entity Compliance Guide (“Guide”).  Exempt entities include banks, credit unions, securities dealers, nonprofits, government agencies and other entities who are, in most cases, reporting through other means. The Guide has both a flow chart, checklist, and examples to assist you in determining if you are required to report.  Mortgage Brokers do not appear on the exempt list, however if your company falls under the definition of Large Operating Company, it may be exempt.

A basic definition of a Large Operating Company, is one which has:

  • more than 20 full time employees,
  • a physical office in the United States, and
  • filed a tax return reporting $5,000,000, or more, in gross receipts or sales.

If you feel you meet all of these initial requirements, check the Guide (see below) to determine if you are exempt from reporting.

For entities formed after December 31, 2023, the information report must be filed within 90 days of registering with the Secretary of State.  Beginning in 2025, the time to report decreases to 30 days after formation.

For existing entities (those formed before January 1, 2024) the report must be filed by January 1, 2025.  If after filing the report, there are changes to information, such as change of ownership or address, a corrected report must be filed within 30 days. 

The form is filed electronically at  You can use a third party reporting service, however FinCEN is alerting filers that there have already been fraudulent attempts to gather your information. Use caution! If you choose to file the report yourself (and I think it is fairly simple), only file on websites that are “.gov” sites. 

The information required for the filing is fairly basic, i.e. names, doing business as, address, state of formation, tax identification number (EIN) (most of which is available to the public already), along with the information on all Beneficial Owners.

A Beneficial Owner is one whose ownership interest, either directly or indirectly, is greater than 25%, or one who exercises substantial control over the reporting entity, without regard to ownership interest.  It can include senior officers, and others including but not limited to board members. The fines for noncompliance are steep and entities should proceed with caution when determining who might be considered a Beneficial Owner. The Guide also has a checklist, and many examples, for the purpose of determining who should be considered and who do not fall under the definition of Beneficial Owner.

Both entities and individuals may obtain a FinCEN identifier by directly providing, to FinCEN, the same information that is required on the report. For example, if an individual does not want to provide their personal information to you, they may provide their unique FinCEN identifier which is then used on the form in place of the information. It would also be helpful to have a FinCEN identifier in the case of multiple entities and/or Beneficial Owners.

Penalties for noncompliance can be fines up to $500 per day until the violation is rectified. If noncompliance results in criminal charges, the penalty increases up to $10,000 and/or two years imprisonment.

For additional information there is a Small Entity Compliance Guide found at It is 57 pages, but easy to navigate and thoroughly explains the requirements, exemptions, and penalties for non-compliance.